    [Senate Hearing 111-534]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 111-534

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2010

    =======================================================================

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 FIRST SESSION

                                       ON

                               H.R. 3183/S. 1436

     AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2010, AND FOR OTHER PURPOSES

                                   __________

                          Department of Defense--Civil
                              Department of Energy
                           Department of the Interior
                           Nondepartmental Witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

      Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                   index.html

                                   __________

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                          COMMITTEE ON APPROPRIATIONS

                       DANIEL K. INOUYE, Hawaii, Chairman
    ROBERT C. BYRD, West Virginia        THAD COCHRAN, Mississippi
    PATRICK J. LEAHY, Vermont            CHRISTOPHER S. BOND, Missouri
    TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
    BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
    HERB KOHL, Wisconsin                 JUDD GREGG, New Hampshire
    PATTY MURRAY, Washington             ROBERT F. BENNETT, Utah
    BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
    DIANNE FEINSTEIN, California         SAM BROWNBACK, Kansas
    RICHARD J. DURBIN, Illinois          LAMAR ALEXANDER, Tennessee
    TIM JOHNSON, South Dakota            SUSAN COLLINS, Maine
    MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
    JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
    FRANK R. LAUTENBERG, New Jersey
    BEN NELSON, Nebraska
    MARK PRYOR, Arkansas
    JON TESTER, Montana
    ARLEN SPECTER, Pennsylvania

                        Charles J. Houy, Staff Director
                      Bruce Evans, Minority Staff Director
                                     ------

                  Subcommittee on Energy and Water Development

                    BYRON L. DORGAN, North Dakota, Chairman
    ROBERT C. BYRD, West Virginia        ROBERT F. BENNETT, Utah
    PATTY MURRAY, Washington             THAD COCHRAN, Mississippi
    DIANNE FEINSTEIN, California         MITCH McCONNELL, Kentucky
    TIM JOHNSON, South Dakota            CHRISTOPHER S. BOND, Missouri
    MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
    JACK REED, Rhode Island              RICHARD C. SHELBY, Alabama
    FRANK R. LAUTENBERG, New Jersey      LAMAR ALEXANDER, Tennessee
    TOM HARKIN, Iowa                     GEORGE V. VOINOVICH, Ohio
    JON TESTER, Montana
    DANIEL K. INOUYE, Hawaii, (ex
        officio)

                               Professional Staff

                                   Doug Clapp
                                 Roger Cockrell
                             Franz Wuerfmannsdobler
                            Scott O'Malia (Minority)
                             Brad Fuller (Minority)

                             Administrative Support

                                Molly Barackman

                                C O N T E N T S

                                  ----------

                             Tuesday, May 19, 2009

                                                                       Page

    Department of Energy.............................................     1

                             Tuesday, June 2, 2009

    Deparment of Energy: National Nuclear Security Administration....    51

                            Thursday, June 18, 2009

    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................    91
    Department of the Interior: Bureau of Reclamation................   106

                           Nondepartmental Witnesses

    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................   157
    Department of the Interior: Bureau of Reclamation................   181
    Department of Energy.............................................   201

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2010

                                  ----------

                             TUESDAY, MAY 19, 2009

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:22 a.m., in room SD-138, Dirksen
    Senate Office Building, Hon. Byron L. Dorgan (chairman)
    presiding.
        Present: Senators Dorgan, Murray, Feinstein, Reed, Tester,
    Bennett, Cochran, and Alexander.

                              DEPARTMENT OF ENERGY

    STATEMENT OF HON. STEVEN CHU, SECRETARY

                  opening statement of senator byron l. dorgan

        Senator Dorgan. I'm going to call the hearing to order.
    This is a hearing of the Energy and Water Subcommittee of the
    Appropriations Committee. Dr. Chu, we welcome you to the
    subcommittee this morning. I'm sorry for the inconvenience.
    We're starting a few minutes late. I think probably all three
    of us were on the floor of the Senate, waiting for a 10 or
    10:15 vote to occur, and we were just informed it won't occur
    now, but will occur sometime in the future, either in the short
    term or the longer term, any moment, or perhaps sometime today.
    So that's the reason I was a bit delayed.
        We have asked Secretary Chu from the Department of Energy
    to come and present and discuss the 2010 budget. My expectation
    is that we will be truncated a bit and probably be interrupted
    with a short recess for a cloture vote. I want to note that we
    will have Administrator D'Agostino before the subcommittee on
    June 2, to discuss the National Nuclear Security
    Administration's budget request. We're free to discuss any of
    that today as well, but I simply want to remind members that
    there will be further opportunity to discuss that in 2 weeks'
    time.
        This year's budget of $27.1 billion for the Department is
    basically flat compared to 2009 appropriation numbers. A
    substantial sum of money, a great deal of money, was provided--
    $38.7 billion as a part of the American Recovery and
    Reinvestment Act. Those numbers, of course, were not intended
    to be a substitute for the regular budget. They were intended
    for the purpose of moving money around the country, getting
    people to work, getting contractors working and building
    projects and doing things that are of substantial value, and
    creating assets for the future.
        I was a bit surprised when I received the President's
    budget. Because I felt that with the economy recovery funds, a
    very substantial amount of money, $38.7 billion, to the
    Department, that we might see a very different approach in
    trying to deal with the priorities in the Department. And I'm
    going to talk to you today about some of the strengths that I
    see in the budget request and some of the concerns that I have.
        I think there are some good stories in the funding increase
    proposals. I think we have to maximize the capability of
    renewable energy in our country. In order to do that, we not
    only have to say, ``Here's where the country's headed,'' and
    plot a map to get there, but we have to create the capability
    to have an interstate transmission capability that connects all
    of America. That's not easy, that's very difficult to do.
        The science budget is robust. There's also a proposal for
    eight new Energy Innovation Hubs, which I view as a means of
    helping the Department of Energy address what normally people
    call the Valley of Death, the dilemma of getting technology
    transferred from basic science to applied research and then out
    into the marketplace, so that it accomplishes what we intend to
    accomplish in the field of energy for our country's future.
        I'm going to just truncate my statement. I will, during the
    questioning, have an opportunity to go through a wide range of
    subjects with you, Secretary Chu. I think what I'd like to do,
    with the permission of our colleagues, is call on Senator
    Bennett for a brief opening statement, call on the Secretary to
    make a presentation. Perhaps about that time, we'll have to go
    over for the cloture vote. And then come back and have
    substantial opportunity this morning to ask questions of the
    Secretary.
        If that is all right with my colleagues, let me call on the
    ranking member, Senator Bennett.

                 OPENING STATEMENT OF SENATOR ROBERT F. BENNETT

        Senator Bennett. Thank you very much, Mr. Chairman. I will
    abbreviate my opening statement. Mr. Secretary, welcome to the
    subcommittee. We're glad to have you here in your first
    experience in defending your budget. And having served in the
    executive branch myself, I know that this isn't entirely your
    budget, that the OMB has had a few suggestions, shall we say.
    And you may or may not be pleased with those, but I won't call
    on you to defend or comment on those.
        Just a few highlights, you apply additional resources to
    programs that appear to already enjoy some surpluses, but fail
    to address chronic pension shortfalls that have been created by
    the poor market performance. Now, I understand that these could
    not be foreseen, but I don't think it's acceptable to ignore
    the estimated $500 to $600 million shortfall spread across the
    Department and the impact that that will have in undercutting
    scientific and cleanup missions.
        I continue my interest in NNSA and the labs, and would be
    interested in talking to you about that and some of the
    comments that you've made there. The Office of Science and
    Renewable Energy has received nearly 50 percent of the stimulus
    funding, and it seems unlikely that this will be spent before
    the 2010 deadline. So we could talk about how that could be
    shifted, it's not a matter of I don't favor this kind of thing,
    but you can only shovel so much money out the door in certain
    circumstances, and that's one thing that I would look at.
        Funding for environmental cleanup is down $161 million.
    There are two other factors that significantly increase the
    deficit of this program. It fails to fully fund the pension
    shortfalls that will reduce environmental cleanup by an
    estimated $400 million in fiscal year 2010, and I've included
    an amendment to the budget resolution to mitigate the impacts
    that budgets will have on the cleanup. And I'm grateful, Mr.
    Chairman, for your support in that effort.
        The budget includes a $200 million tax on uranium fuel to
    be paid by utilities, offsetting this to our overall budget
    authority. If we don't do this--and it's frankly a little bit
    of a budget gimmick--it creates a $200 million shortfall in our
    bill. And this revenue isn't necessary, as there is $4.5
    billion in existing balances. Those kinds of details, we would
    talk through.
        So with that, Mr. Chairman, I will leave it there and do
    the best we can to move the hearing forward.
        Senator Dorgan. Senator Bennett, thank you very much. Mr.
    Secretary, I know that you personally worked hard on the budget
    that was presented to us, but you did so with very limited time
    and also with very limited staff. I regret that a good number
    of your nominations are all being held up. I have spoken to the
    Senator that has the hold. It's a hold that's very Byzantine,
    as far as I'm concerned, because that Senator has been promised
    a hearing date, which is what he wanted. So I hope that you get
    those nominations through so that you can have a full
    complement of staff.
        But having done what you have done, please tell us the
    justification for the administration's budget proposals for the
    Department of Energy. Mr. Secretary, thank you for being here.

                          STATEMENT OF HON. STEVEN CHU

        Secretary Chu. Okay, thank you. Chairman Dorgan, Ranking
    Member Bennett, members of the subcommittee, I am pleased to be
    before you today to present President Obama's fiscal year 2010
    budget request for the Department of Energy.
        The President's 2010 budget seeks to usher in a new era of
    responsibility, an era in which we invest to create new jobs
    and lift our economy out of recession, while laying a new
    foundation for our long-term growth and prosperity.
        President Obama's 2010 budget invests in clean, renewable
    sources of energy, so we can reduce our dependence on oil,
    address the threat of a changing climate, and become the world
    leader in new, clean energy economy.
        The 2010 budget request for the Department of Energy is
    $26.4 billion, essentially flat compared to fiscal year 2009,
    and it complements the significant energy investments in the
    American Recovery and Reinvestment Act. This budget request
    emphasizes science, discovery, and innovation to support the
    key missions of the Department.
        My written testimony includes an extensive breakdown of
    this budget, and I'd like to use this time briefly to highlight
    a few numbers and areas of particular importance. To promote
    nuclear security in the President's ambitious non-proliferation
    goals, the budget requests $9.9 billion for the National
    Nuclear Security Administration.
        To continue to accelerate legacy cleanup of our Nation's
    nuclear weapons production, the budget requests $5.8 billion
    for the Office of Environmental Management. To bolster the
    Department's commitment to scientific discovery, the budget
    requests $4.9 billion for the Office of Science. And fostering
    the revolution in energy supply and demand while positioning
    the United States to lead on a global climate change policy,
    the budget includes requests for a range of energy investments,
    including $882 million for the Office of Fossil Energy, $845
    million for the Office of Nuclear Energy, and $2.3 billion for
    the Office of Energy Efficiency and Renewable Energy.
        That clean energy funding includes several notable
    strategic investments, even as this budget holds the line on
    spending overall. Solar power will receive $320 million, an
    increase of 82 percent. Wind energy is funded at $75 million,
    an increase of 36 percent. Funding for clean vehicle programs
    is up 22 percent to $333 million, and funding for building
    technologies is increased by 69 percent to $238 million.
        Another significant increase is in the Office of
    Electricity Delivery and Energy Reliability, which received
    $208 million, 52 percent more than in fiscal year 2009, as it
    works to develop a new smart electric grid. The request also
    includes funding to implement the Loan Guarantee Program and
    Advanced Technology Vehicle Manufacturing Loan Program.
        With that brief overview, I want to turn to one of my top
    priorities in the budget as Secretary, amplifying the Office of
    Science's fundamental research with innovative approaches to
    solving the Nation's energy problems. Specifically, this budget
    request includes three initiatives designed to cover a spectrum
    of basic to applied science to maximize our chances of energy
    breakthroughs. The fiscal year 2010 budget will launch eight
    Energy Innovation Hubs, while the Energy Frontier Research
    Centers and the ARPA-E were launched last month.
        Let me briefly explain the differences among these
    initiatives and why I believe launching these hubs is so
    important. The EFRCs are small-scale collaborations,
    predominately universities, that focus on overcoming known
    hurdles in basic science that block energy breakthroughs, not
    on developing energy technologies themselves.
        ARPA-E is a highly entrepreneurial funding model that
    explores potentially revolutionary technologies that are too
    risky for industry to fund. The proposed Energy Innovation Hubs
    will take a very different approach. They will be multi-
    disciplinary, highly collaborative teams, ideally working under
    one roof to solve priority technology challenges, such as
    artificial photosynthesis, or creating fuels from sunlight.
        A few years ago, I changed the course of my scientific work
    to focus on solving our energy and climate challenges because
    of the urgency of this issue and because I remain optimistic
    that science can offer better solutions than we can imagine
    today. But those solutions will only come if we harness the
    creativity and ingenuity and intellectual horsepower of our
    best scientists in the right way.
        I'm convinced that launching Energy Innovation Hubs is a
    critical next step in this effort. Bringing together the best
    scientists from different disciplines in a collaborative effort
    is our best hope of achieving priority goals, such as making
    solar energy cost competitive with fossil fuels, or developing
    new building designs that use dramatically less energy, or
    developing an economical battery that will take your car 300
    miles without recharging.
        These are the breakthroughs we need, and the Energy
    Innovation Hubs will help us achieve them. I saw the power of
    truly collaborative science like this firsthand during my time
    at Bell Laboratories. I believe that to solve the energy
    problem, the Department of Energy must strive to be the modern
    version of Bell Laboratories in energy research, and this is
    what these hubs will do. These investments will pay for
    themselves many times over and enhance America's
    competitiveness on the green energy jobs of tomorrow.
        A final initiative in the fiscal year 2010 budget is a
    comprehensive K-20+ science and engineering effort called RE-
    ENERGYSE, standing for REgaining our ENERGY Science and
    Engineering Edge, funded at $115 million. Through RE-ENERGYSE,
    the Department will partner with the National Science
    Foundation to educate thousands of students at all levels in
    the fields that contribute to our fundamental understanding of
    energy science and engineering systems.

                               PREPARED STATEMENT

        It is my firm belief that the short-term impact of the
    Recovery Act, combined with the long-term vision in President
    Obama's fiscal year 2010 budget, will lay the necessary
    groundwork for a clean economy. Both President Obama and I look
    forward to working with the 111th Congress to make this vision
    a reality. I appreciate this opportunity to appear before you,
    and I'm happy to take questions at this time.
        [The statement follows:]

                     Prepared Statement of Hon. Steven Chu

        Chairman Dorgan, Ranking Member Bennett, members of the
    subcommittee, I am pleased to be before you today to present President
    Obama's fiscal year 2010 budget request for the Department of Energy.
        The President's 2010 budget seeks to usher in a new era of
    responsibility--an era in which we invest to create new jobs and lift
    our economy out of recession, while laying a new foundation for our
    long-term growth and prosperity.
        The fiscal year 2010 budget request of $26.4 billion provides the
    next critical investment in a multi-year effort to address the
    interconnected challenges of economic uncertainty, U.S. dependence on
    oil, and the threat of a changing climate by transforming the way our
    Nation produces and consumes energy. Meeting these challenges will
    require both swift action in the near-term and a sustained commitment
    for the long term to build a new economy powered by clean, reliable,
    affordable and secure energy. We will also train the next generation of
    a technical workforce and the scientific researchers needed to maintain
    the United States' preeminent position in science and technology. At
    its core, this budget request emphasizes science, discovery, and
    innovation to support the key missions of the Department.
        I want to note at the outset that in developing the fiscal year
    2010 request the Department considered that the $38.7 billion of
    American Recovery and Reinvestment Act of 2009 (Recovery Act) funding
    received by the Department allows for the acceleration of a number of
    important commitments. The Recovery Act makes investments in energy
    conservation and renewable energy sources ($16.8 billion),
    environmental management ($6 billion), loan guarantees for renewable
    energy and electric power transmission projects ($6 billion), grid
    modernization ($4.5 billion), carbon capture and sequestration ($3.4
    billion), basic scientific research ($1.6 billion), and the
    establishment of the Advanced Research Projects Agency-Energy (ARPA-E)
    ($400 million). These investments will help jumpstart the economy, save
    and create jobs, and serve as a down payment on addressing fundamental
    energy challenges, while reducing carbon emissions and U.S. dependence
    on oil.

          INVESTING IN SCIENCE TO ACHIEVE TRANSFORMATIONAL DISCOVERIES

        The fiscal year 2010 budget request supports our strategic
    framework by:
      --Investing in science to achieve transformational discoveries;
      --Fostering the revolution in energy supply and demand while
            positioning the United States to lead on global climate change
            policy;
      --Increasing American economic competitiveness;
      --Maintaining the nuclear deterrent, reducing the risk of nuclear
            proliferation, and advancing nuclear legacy cleanup; and
      --Improving the management of the Department.
        The President has committed to doubling Federal investment in basic
    research over 10 years. The Department will support this commitment by
    investing in basic and applied research, creating new incentives for
    private innovation, and promoting breakthroughs in energy. Our Nation's
    ability to sustain a growing economy and a rising standard of living
    for all Americans depends on continued advances in science and
    technology. Scientific and technological discovery and innovation are
    the major engines of increasing productivity and are indispensable to
    ensuring economic growth, job creation, and rising incomes for American
    families in the technologically-driven 21st century.
        As Secretary, one of my top priorities is to amplify the
    fundamental research undertaken by the Office of Science with novel
    approaches to solving the Nation's energy problems. While the
    Department has made important contributions over the years, despite
    almost three decades of effort, we are still confronted by the
    fundamental problems of energy security and environmental degradation
    from our energy use. That is why I am proposing new approaches to
    solving the energy question. Specifically, this budget request includes
    three initiatives designed to cover the spectrum of basic to applied
    science to maximize our chances of energy breakthroughs. The fiscal
    year 2010 budget will launch eight Energy Innovation Hubs, while the
    Energy Frontier Research Centers (EFRCs) and ARPA-E were launched last
    month.
        Let me briefly explain the differences and why I believe launching
    these Hubs is so important.
        EFRCs are small-scale collaborations (predominantly at
    universities) that focus on overcoming known hurdles in basic science
    that block energy breakthroughs--not on developing energy technologies
    themselves.
        ARPA-E is a highly entrepreneurial funding model that explores
    potentially revolutionary technologies that are too risky for industry
    to fund.
        The proposed Energy Innovation Hubs will take a very different
    approach--they will be multi-disciplinary, highly collaborative teams
    ideally working under one roof to solve priority technology challenges,
    such as artificial photosynthesis (creating fuels from sunlight).
        A few years ago, I changed the course of my scientific work to
    focus on solving our energy and climate challenges. I did so because of
    the great national and global urgency of this issue--but also because,
    as a scientist, I remain optimistic that science can offer us better
    solutions than we can imagine today. But those solutions won't come
    easily; they will only come if we harness the creativity and ingenuity
    and intellectual horsepower of our best scientists in the right way.
        Having dedicated the last several years of my work to solving the
    energy challenge, I'm convinced that launching Energy Innovation Hubs
    is a critical next step in this effort. Bringing together the best
    scientists from different disciplines in collaborative efforts is our
    best hope of achieving priority goals such as making solar energy cost
    competitive with fossil fuels, or developing new building designs that
    use dramatically less energy, or developing an economical battery that
    will take your car 300 miles without recharging.
        These are the breakthroughs we need--and the Energy Innovation Hubs
    will help us achieve them. I saw the power of truly collaborative
    science like this firsthand during my time at Bell Laboratories. I
    believe that to solve the energy problem, the Department of Energy must
    strive to be the modern version of Bell Labs in energy research, and
    that is what these Hubs will do.
        The scientific collaboration the Hubs will foster will be unique
    and indispensable, and must be backed by a meaningful and sustained
    investment. These investments will pay for themselves many times over,
    ensuring American leadership and American competitiveness when it comes
    to the green energy jobs of tomorrow.
        The following is additional information about the three
    initiatives:
      --Energy Innovation Hubs.--In fiscal year 2010 the Department
            proposes to fund eight multi-disciplinary Energy Innovation
            Hubs, at a total of $280 million. Modeled after the
            Department's Bioenergy Research Centers, the work of the Hubs
            will span from basic research to engineering development to
            commercialization and a hand-off to industry. Each Hub will be
            funded at $25 million per year, with one-time additional start-
            up funding of $10 million in the first year for renovation,
            equipment and instrumentation.
          The Hubs will support cross-disciplinary research and development
            focused on the barriers to transforming energy technologies
            into commercially deployable materials, devices, and systems.
            They will advance highly promising areas of energy science and
            technology from their early stages of research to the point
            that the risk level will be low enough for industry to deploy
            them into the marketplace. While the intent is to provide a
            funding stream that is more dependable than the standard
            funding mechanisms, renewal after 5 years will not be
            automatic. To receive renewed funding, Hubs will be expected to
            be delivering exceptional scientific progress.
          The research Hubs will explore the following topics: Solar
            Electricity; Fuels from Sunlight; Batteries and Energy Storage;
            Carbon Capture and Storage; Grid Materials, Devices, and
            Systems; Energy Efficient Building Systems Design; Extreme
            Materials; and Modeling and Simulation.
      --Energy Frontier Research Centers.--In fiscal year 2010 the
            Department of Energy will continue to support Energy Frontier
            Research Centers (EFRC). Currently there are 46 EFRCs, funded
            at $2 to $5 million per year. These centers enlist the talents
            and skills of the very best scientists and engineers to address
            current fundamental scientific roadblocks to clean energy and
            energy security. Roughly one-third of the centers are supported
            by Recovery Act funding. These centers, involving almost 1,800
            researchers and students from universities, national labs,
            industry, and non-profit organizations from 36 States and the
            District of Columbia, address the full range of energy research
            challenges in renewable and low-carbon energy, energy
            efficiency, energy storage, and cross-cutting science. EFRC
            researchers take advantage of new capabilities in
            nanotechnology, light sources that are a million times brighter
            than the sun, supercomputers, and other advanced
            instrumentation, much of it developed in collaboration with the
            Department of Energy's Office of Science.
      --Advanced Research Projects Agency-Energy (ARPA-E).--ARPA-E is a new
            Department of Energy organization modeled after the Defense
            Advanced Research Projects Agency, created during the
            Eisenhower administration in response to Sputnik. The Recovery
            Act provided $400 million and the fiscal year 2010 budget
            requests $10 million for ARPA-E. The purpose of ARPA-E is to
            advance high-risk, high-reward energy research projects that
            can yield revolutionary changes in how we produce, distribute,
            and use energy. It will ensure that the United States maintains
            a technological lead in developing and deploying advanced
            energy technologies.
          ARPA-E seeks out the best ideas and assembles teams that can move
            quickly to help bring the idea to market, and funds this work
            through grants that range between $500,000 and $10 million.
            Most projects will be funded with seed money that sunsets after
            3 years. Research teams are expected to either make
            exceptionally rapid progress or bring their technology to the
            point the private sector can pick it up within that time.
        These initiatives will be augmented with a broad educational effort
    that cuts across DOE program offices to inspire students and workers to
    pursue careers in science, engineering, and entrepreneurship
    specifically related to clean energy. This education effort will help
    to develop the scientific and technical expertise to sustain the new
    energy economy and increase American competitiveness.
      --RE-ENERGYSE (REgaining our ENERGY Science and Engineering Edge).--
            As part of President Obama's recent address before the National
            Academy of Sciences on reinvigorating scientific research and
            innovation in the United States, the President announced a
            joint education initiative between the National Science
            Foundation and the Department of Energy to ``inspire tens of
            thousands American students to pursue careers in science,
            engineering and entrepreneurship related to clean energy.''
          As part of this initiative, the Department will launch a
            comprehensive K-20+ science and engineering initiative, funded
            at $115 million in fiscal year 2010, to educate thousands of
            students at all levels in the fields contributing to the
            fundamental understanding of energy science and engineering
            systems. This initiative, which complements the Department's
            other education efforts, will provide graduate research
            fellowships in scientific and technical fields that advance the
            Department's energy mission; provide training grants to
            universities that establish multidisciplinary research and
            education programs related to clean energy; support
            universities that dramatically expand energy-related research
            opportunities for undergraduates; build partnerships between
            community colleges and different segments of the clean tech
            industry to develop customized curriculum for ``green collar''
            jobs; and increase public awareness, particularly among young
            people, about the role that science and technology can play in
            responsible environmental stewardship.

    Office of Science
        The fiscal year 2010 budget requests $4.9 billion for the Office of
    Science, a $184 million increase over fiscal year 2009. In general, the
    2010 request will focus on breakthrough science while developing and
    nurturing science and engineering talent. It will also increase funding
    for climate science and continue America's role in international
    science and energy experiments. The budget also invests in the next
    generation of America's scientists by expanding graduate fellowship
    programs in critical energy-related fields. This funding builds upon
    the $1.6 billion provided in the Recovery Act for basic science
    programs at the Department of Energy.
        The Office of Science supports investigators from more than 300
    academic institutions and from all of the DOE laboratories. The fiscal
    year 2010 budget request will support about 25,000 Ph.D.s, graduate
    students, undergraduates, engineers, and technicians. Approximately
    24,000 researchers from universities, national laboratories, industry,
    and international partners are expected to use the Office of Science's
    scientific user facilities. The fiscal year 2010 request supports the
    President's plan to increase Federal investment in the sciences and
    train students and researchers in critical fields, to invest in areas
    critical to our clean energy future, and to make the United States a
    leader on climate change.
        Two of the Department's eight Energy Innovation Hubs are requested
    in the Office of Science in fiscal year 2010 ($70 million). These Hubs
    will bring together teams of experts from multiple disciplines to focus
    on two grand challenges in energy: the creation of fuels directly from
    sunlight without the use of plants or microbes and advanced methods of
    electrical energy storage.
        The Office of Science supports a diverse number of research
    programs including:
      --High-Energy Physics ($819 million)
      --Nuclear Physics ($552 million)
      --Biological and Environmental Research ($604 million)
      --Basic Energy Sciences ($1.7 billion)
      --Advanced Scientific Computing Research ($409 million)
      --Fusion Energy Sciences ($421 million)
    fostering the revolution in energy supply and demand while positioning
           the united states to lead on global climate change policy
        U.S. dependence on oil is a national security challenge.
    Furthermore, the United States has a responsibility to curb carbon
    emissions to mitigate the effects of global climate change. The fiscal
    year 2010 budget request will expand the use of low-carbon and
    renewable energy sources and efficiency, and support the Smart Grid.
    Deploying these technologies will position the United States to lead on
    global climate change policy.

    Energy Efficiency and Renewables
        Achieving these goals requires changes to both the demand and
    supply of energy. DOE is addressing both by improving the Nation's
    energy efficiency to reduce energy demand and by investing in
    technologies and approaches to transform energy supply and
    transmission. The fiscal year 2010 budget request of $2.3 billion for
    the Office of Energy Efficiency and Renewable Energy (EERE) will
    transform the Nation's energy infrastructure by investing in a variety
    of renewable sources of electricity generation and deploying
    technologies to reduce our dependence on oil and decrease energy use in
    homes, transportation, and industry. These sources of energy will
    reduce the production of GHG emissions and usher in a revitalized
    economy built on the next generation of domestic production.
    Investments in efficiency R&D, grants to States and weatherization
    assistance will have immediately tangible benefits by reducing energy
    use, lowering energy bills, and reducing GHG emissions and helping to
    create jobs across the country.
        This budget request for EERE provides a diverse portfolio of
    solutions to our energy and environmental challenges. This starts with
    improving energy efficiency, which can be one of the cheapest, cleanest
    means of reducing greenhouse gas emissions. The budget includes
    significant increases in several programs in support of the President's
    efforts to promote energy efficiency, including these increases:
      --Building Technology Program $238 million (+$98 million or 69
            percent)
      --Vehicle Technology Program $333 million (+$60 million or 22
            percent); and
        The budget continues the shift to clean and renewable energy,
    including these increases:
      --Solar Energy Program $320 million (+$145 million, or 82 percent);
      --Wind Energy Program $75 million (+$20 million, or 36 percent); and
      --Geothermal Program $50 million (+$6 million or 14 percent.)
        The budget also has funding for:
      --Fuel Cells Technology ($68.2 million)
      --Biomass and Biorefinery Systems R&D ($235 million)
      --Water Power ($30 million)
      --Industrial Technologies ($100 million)
      --FEMP ($32.3 million)
      --Weatherization ($220 million)
      --State Energy Program Grants ($75 million)

    Electricity Transmission and Reliability
        The Nation's ability to meet the growing demand for reliable
    electricity is challenged by an aging electricity transmission and
    distribution system and by vulnerabilities in the U.S. energy supply
    chain. Despite increasing demand, the United States has experienced a
    long period of underinvestment in power transmission and infrastructure
    maintenance. The majority of the power delivery system was built on
    technology developed in the 1960s, 1970s and 1980s and is limited by
    the speed with which it can respond to disturbances. This limitation
    increases the vulnerability of the power system to outages that can
    spread quickly and have regional effects. Deploying the next generation
    of clean energy sources will require modernization of U.S. energy
    infrastructure which will rely on digital network controls and
    transmission, distribution and storage breakthroughs.
        The proposed fiscal year 2010 Office of Electricity Delivery and
    Energy Reliability budget provides $208 million, an increase of 52
    percent over fiscal year 2009, and builds on the ``smart grid''
    investments and other activities to modernize and secure the electric
    grid provided by $4.5 billion of Recovery Act funds, supporting the
    following areas:
      --Clean energy transmission and reliability ($42 million)
      --Smart grid research and development ($67 million)
      --Energy storage ($15 million)
      --Cyber security for energy delivery systems ($50 million)
      --Permitting, siting and analysis ($6.4 million)
      --Infrastructure security and energy restoration ($6.2 million)

    Fossil Energy
        The fiscal year 2010 budget request of $882 million for the Office
    of Fossil Energy (FE) will help ensure that the United States can
    utilize traditional domestic energy resources in a clean and affordable
    manner. The United States has 25 percent of the world's coal reserves,
    and fossil fuels currently supply 86 percent of the Nation's energy.
    Low-carbon emissions coal plants and production of methane (natural
    gas) from gas hydrates will help allow fossil fuels to be used as
    abundant and low-carbon emitting energy resources. In direct support of
    the Department of Energy's Energy Security mission, $229 million of the
    $882 million has been requested to provide operations, maintenance and
    repair funding for a Strategic Petroleum Reserve program that is
    environmentally responsible and fully responsive to the needs of the
    Nation and the public, protecting against potential disruptions in
    foreign and domestic petroleum supplies.
        The Department is committed to advancing Carbon Capture and Storage
    (CCS) technologies in order to promote cleaner and efficient use of
    fossil fuels. The $3.4 billion in Recovery Act funds, combined with
    $222 million requested in fiscal year 2010 for CCS research and
    development, is the keystone of the Department's clean coal research
    program which seeks to establish the capability of producing
    electricity from coal with dramatically reduced atmospheric emissions
    of carbon dioxide.
        In fiscal year 2010, the Energy Innovation Hub for CCS will focus
    on enabling fundamental advances and discovery of novel and
    revolutionary capture/separation approaches to dramatically reduce the
    energy penalty and cost associated with CO2 capture.
        The fiscal year 2010 budget request for FE funds the following
    areas:
      --Coal ($403.9 million) including $179.9 million for carbon
            sequestration
      --Fossil energy research and development ($617.6 million)
      --Naval Petroleum and Oil Shale Reserves ($23.6 million)
      --Strategic Petroleum Reserve ($229.1 million)
      --Northeast Home Heating Oil Reserve ($11.3 million)

    Nuclear Energy
        The $845 million budget request for the Office of Nuclear Energy
    (NE) recognizes that nuclear energy is a fundamental component of the
    energy mix which currently supplies approximately 20 percent of the
    Nation's electricity and over 70 percent of low carbon emitting
    electricity.
        In order to research and develop nuclear energy technologies that
    could help meet non-proliferation and climate goals, and to maintain
    the national nuclear technology infrastructure, the fiscal year 2010
    budget request for NE funds the following areas:
      --Nuclear Power 2010 ($20 million)
      --Generation IV ($191 million)
      --Fuel Cycle Research and Development Program ($192 million)
      --Radiological Facilities Management ($77 million)
      --Idaho Facilities Management ($203 million)

    Loan Guarantee Program
        In fiscal year 2010, the DOE will continue to accelerate the
    availability of loans for innovative technologies through the Loan
    Guarantee Program, while ensuring taxpayer interests are protected. The
    Department requests $43.0 million in funding in fiscal year 2010 to
    operate the Office and support personnel and associated costs. This
    request will be offset by collections authorized under title XVII of
    the Energy Policy Act of 2005 (EPACT 2005). Additionally, the fiscal
    year 2010 budget provides $20 million for administrative costs to help
    enable the Advanced Technology Vehicle Manufacturing Loan Program to
    support up to $25 billion in loans to automobile and automobile part
    manufacturers for re-equipping, expanding, or establishing
    manufacturing facilities to produce advanced technology vehicles or
    qualified components.

        MAINTAINING THE NUCLEAR DETERRENT, REDUCING THE RISK OF NUCLEAR
              PROLIFERATION, AND ADVANCING NUCLEAR LEGACY CLEAN-UP

    Nuclear Security
        The National Nuclear Security Administration (NNSA) continues
    significant efforts to meet administration and secretarial priorities,
    leveraging science to promote national security. The fiscal year 2010
    President's budget request is $9.9 billion, which is $815 million more
    than the fiscal year 2009 request, to meet defense and homeland
    security-related objectives.
        The United States continues a fundamental shift in national
    security strategy to address the realities of the 21st century. The
    fiscal year 2004 directed reductions to the U.S. nuclear weapons
    stockpile were completed in 2007, 5 years early. Today's nuclear
    weapons stockpile is now the size envisioned for 2012, and by 2012 it
    will be almost 15 percent less than that--a total that is just 25
    percent of what it was at the end of the cold war. Consistent with the
    administration's Nuclear Posture Review, the Department of Energy has
    created a vision for a revitalized nuclear weapons complex that is
    significantly more agile and responsive, and will allow further
    reductions in the nuclear stockpile by providing an industrial hedge
    against geopolitical or technical problems.
        The fiscal year 2010 budget request for NNSA funds the following
    areas:
      --Weapons Activities ($6.4 billion)
      --Defense Nuclear Nonproliferation ($2.14 billion)
      --Naval Reactors ($1.0 billion): $175 million increase from fiscal
            year 2009
      --Office of the Administrator ($420.8 million)

    Environmental Management
        The Federal Government has the dual responsibilities of addressing
    the nuclear weapons production legacy of our past and providing the
    necessary environmental infrastructure for today that will ensure a
    clean, safe and healthy environment for future generations. To deliver
    on the Department's obligations stemming from 50 years of nuclear
    research and weapons production during the cold war, the Office of
    Environmental Management (EM) continues to focus its resources on those
    activities that will yield the greatest risk reductions, with safety as
    the utmost priority. To achieve a balance of risk reduction and
    environmental cleanup, the fiscal year 2010 request of $5.8 billion, a
    decrease of 3 percent from fiscal year 2009, builds upon the $6 billion
    in Recovery Act funding. These investments are already having an
    impact. Fifty skilled new workers recently reported to work at the
    Savannah River Site.
        This request supports the following activities, in priority order:
      --Essential activities to maintain a safe and secure posture in the
            EM complex
      --Radioactive tank waste stabilization, treatment, and disposal
      --Spent nuclear fuel storage, receipt and disposition
      --Special nuclear material consolidation, processing, and disposition
      --High priority groundwater remediation
      --Transuranic and mixed/low level waste disposition
      --Soil and groundwater remediation
      --Excess facilities deactivation & decommissioning
        In developing the fiscal year 2010 budget for its environmental
    cleanup efforts, the Department will focus on achieving the greatest
    risk reduction, while also incorporating regulatory compliance
    commitments and best business practices, to maximize cleanup progress.
    In fiscal year 2010, EM is aggressively pursuing the consolidation and
    disposition of surplus plutonium and other special nuclear materials to
    enhance national security and to minimize the storage risks and costs
    associated with these materials. In addition, EM continues to make
    significant progress on the construction and operation of waste
    treatment and immobilization facilities across the complex. The budget
    continues shipments of remote-handled transuranic waste to the Waste
    Isolation Pilot Plant.
        The fiscal year 2010 budget request for EM funds the following
    activities:
      --Non-Defense Environmental Management ($238 million)
      --Defense Environmental Management ($5.5 billion)
      --UED&D Fund ($559 million)

    Yucca Mountain
        The fiscal year 2010 budget request of $197 million for OCRWM
    implements the administration's decision to terminate the Yucca
    Mountain program while developing nuclear waste disposal alternatives.
    All funding for development of the Yucca Mountain facility would be
    eliminated, such as further land acquisition, transportation access,
    and additional engineering. The budget request includes the minimal
    funding needed to explore alternatives for nuclear waste disposal
    through OCRWM and to continue participation in the Nuclear Regulatory
    Commission (NRC) license application process, consistent with the
    provisions of the Nuclear Waste Policy Act. The administration intends
    to convene a ``blue-ribbon'' panel of experts to evaluate alternative
    approaches for meeting the Federal responsibility to manage and
    ultimately dispose of spent nuclear fuel and high-level radioactive
    waste from both commercial and defense activities. The panel will
    provide the opportunity for a meaningful dialogue on how best to
    address this challenging issue and will provide recommendations for
    managing and disposing of spent nuclear fuel and high-level radioactive
    waste.

                   IMPROVING THE MANAGEMENT OF THE DEPARTMENT

        As Secretary, I am making a concerted effort to improve management
    throughout the Department. The Department is committed to strengthening
    its management to implement the $26.4 billion fiscal year 2010 request
    and $38.7 billion of Recovery Act funds. The Department has developed
    strong oversight strategies for Recovery Act implementation, including
    upfront risk assessments and building specific risk management plans,
    upgrading process controls, establishing personal risk assurance
    accountabilities, and expanding outreach, training, and coordination
    between Headquarters and field offices. The Recovery Act, however, is
    only one aspect of a much larger effort to improve the Department's
    management.
        As part of President Obama's commitment to fiscal discipline, DOE
    will focus on using its resources responsibly, transparently, and
    effectively by identifying potential savings throughout the agency. The
    fiscal year 2010 budget request of $182.3 million for Departmental
    Administration, along with resources in individual program offices,
    will continue the improvement in key functional areas such as human,
    financial, project, and information technology management. These
    efforts will instill management excellence and encourage the most
    efficient use of the Department's resources.
        The Office of the Chief Information Officer (CIO) will receive
    $104.5 million, $33.4 million of which will go to cybersecurity and
    secure communications, $9.4 million to the corporate management
    information program, and $23.6 million for energy information
    technology services.
        The Office of the Chief Financial Officer will continue its effort
    in fiscal year 2010 to build and improve its integrated business
    management system, iMANAGE, with the deployment of budget execution and
    formulation modules such as iBUDGET. To accomplish this and other
    goals, the CFO's office will receive $66 million in the fiscal year
    2010 budget. A significant portion of the increase is to assume costs
    previously carried by the CIO for accounting systems operations.
        The Office of Management ($88.4 million) and the Office of Human
    Capital Management ($29.5 million) will help ensure effective and
    efficient management principles permeate from top to bottom at the
    Department of Energy. The Department has been making steady progress in
    improving project management and developed an action plan with concrete
    steps and scheduled milestones to successfully address the root causes
    of the major challenges to planning and managing Department projects.
    The action plan identifies eight measures that, when fulfilled, will
    result in significant, measurable, and sustainable improvements in the
    Department's contract and project management performance and culture.
    Primary actions include: strengthened front-end planning, optimized
    staffing, improved risk management, better alignment of funding
    profiles and cost baselines, strengthened cost estimating capability,
    improved acquisition strategies and plans, improved oversight, and
    stricter adherence to project management requirements.
        The Department's human capital management efforts are focused on an
    integrated approach that ensures human capital programs and policies
    are linked to the Department's missions, strategies, and strategic
    goals, while providing for continuous improvement in efficiency and
    effectiveness. The Department is revising its human capital management
    strategic plan to address future organizational needs, workforce size,
    skill gaps, performance management systems and diversity. To accomplish
    this goal, the Department will continue to implement strategies to
    attract, motivate and retain a highly skilled and diverse workforce to
    meet the future needs of the Nation in such vital areas as scientific
    discovery and innovation.

                                   CONCLUSION

        It is my firm belief that the short-term impact of the Recovery Act
    combined with the new approaches and long-term vision in President
    Obama's fiscal year 2010 budget, will lay the groundwork necessary for
    creating the new green economy. Both President Obama and I look forward
    to working with the 111th Congress to make this vision a reality.
        I appreciate the opportunity to appear before you to present the
    fiscal year 2010 budget proposal for the Department of Energy. I will
    be happy to take any questions that the chairman and members of the
    subcommittee may have at this time.

                              FUNDING ALLOCATIONS

        Senator Dorgan. Mr. Secretary, thank you very much for your
    testimony. I have a good many questions, so I will begin with
    the first few questions, and then my colleagues will ask
    questions, and I will be able to stay and ask remaining
    questions.
        Let me ask you about coal. I asked during, I believe it was
    your confirmation hearing, about the statement, ``Coal is my
    worst nightmare,'' that you made, and you described the context
    of that statement, and I understand it.
        This budget essentially flat funds coal research and
    development. The fact is, coal is our most abundant resource by
    far, not even close. If it's our most abundant resource--and I
    and many others believe and I would hope you believe that we
    can continue to use coal, because we can use science, research,
    and technology to decarbonize coal--then how do we get there if
    we flat fund research and development with respect to coal?
        So can you give me a little bit of the philosophy that led
    to a flat funding for that account? Given what the President
    said about the substantial front-end investments for these
    kinds of things, I would have expected a very substantial
    recommended increase, in order for us to use coal in our
    future, because it's our most abundant resource.
        Secretary Chu. Well, Mr. Chairman, I agree with you, and I
    have to say that this budget reflects that because it has
    folded in the fact that we have received $3.4 billion,
    substantial funds, in the American Recovery and Reinvestment
    Act. Many of the pilot programs for that money, $3.4 billion
    that might have been funded in this section now have gone over
    to that.
        So in a certain sense, that incredibly large amount of
    funding for these pilot programs and the investigations are
    then, say, ``well, we will continue this current budget'',
    certainly if it were not for the Recovery Act funds, you would
    have seen a different budget.
        So even though I know the philosophy of the Recovery Act
    was to be seen as strictly supplemental, in the context of that
    addition, I think it's reasonable.
        Senator Dorgan. Well, that was the philosophy, actually.
    But I think most of the stimulus funding is considered to be
    demonstration projects rather than R&D. In the area of solar,
    which I support, and some other areas, even though there was
    substantial money in the stimulus, there's also substantial
    money in R&D, but coal is flat funded.
        Quickly, do you believe that we will have to continue to
    use coal in our future and need to find ways to decarbonize
    coal?
        Secretary Chu. Yes.

                                    HYDROGEN

        Senator Dorgan. Okay. Well, we'll talk more about that. Let
    me ask you about hydrogen. You have essentially zeroed out the
    hydrogen program. You've moved a portion of it into a different
    direction, but there are about 190 ongoing hydrogen projects
    that are unfunded.
        We've got about 500 jobs, 140 at universities, 150 at
    national laboratories, 235 in industry, that have been working
    on hydrogen. And I agree that hydrogen is not near term. But I
    also agree if someone is going to look at things that are not
    near term, but are essential in the longer term, who but the
    Department of Energy should do that?
        I'm stunned that the budget essentially just moves away
    from hydrogen fuel cell research and stops projects in the
    middle of these projects. I don't understand just deciding to
    take projects that are half completed and say, ``You know what?
    We've decided that we're not going to do those projects
    anymore.'' I'm a big fan of hydrogen in fuel cells, and I
    believe that they are going to be part of our future. I agree
    it's not near term, but I agree also that the Energy Department
    has a significant role in continuing this research, your
    response?
        Secretary Chu. Well, this was a tough call. I think it was
    centered mostly on saying that hydrogen for vehicles is not
    near term, and that we wanted to prioritize to be investing
    more in things like advanced batteries, something that I could
    see in the next 10, 15 years could actually be adopted on a
    significant mass-deployment scale.
        Hydrogen stationary fuel cells I think we will continue
    funding. There are real issues that I have with transportation
    vehicles. The most problematic, in my opinion, is we still have
    not figured out how to store hydrogen in a compact form. So
    while we can be funding more basic research and looking for
    ways to do that, that is something of real significance.
        The other is the infrastructure. We would have to create a
    totally new infrastructure in order to have the hydrogen
    vehicles be fueled. Not insignificant is the fact that the
    hydrogen, if we were to deploy this within the next 10 years,
    would come out of reforming natural gas, and it's a
    questionable call as to whether we want to be using the
    reforming of natural gas.
        And so there are many issues. At a more basic research
    level, I think there have been advances in fuel cells, and we
    want to push on more radical approaches to these things. But I
    think stationary hydrogen is going to be, in my opinion, the
    first application.
        Senator Dorgan. Well, in North Dakota, we're actually using
    wind power to produce hydrogen from water, separating hydrogen
    from--well, at any rate, my point is that I think the
    Department's made a significant mistake here. And I, for one,
    am not interested in shutting down these research projects, and
    I'm going to do everything we can to continue them.
        We're only looking at near term, the next 5 to 15 years,
    but when you come around talking about cap and trade and
    climate change, you're going to talk about 2040 and 2060, 2070.
    So I really think this is an important area of research.
        President Bush, Senator Bennett, myself, so many others
    have been very involved in this, and to see these contracts
    shut down in the middle of the contract on very important
    research, I think is not a smart thing to do. So we'll have
    more to discuss about that.

                             BLUE RIBBON COMMISSION

        Quickly, what is the status of the development of the
    Nuclear Waste Blue Ribbon Commission? You recommend shutting
    down Yucca Mountain as a storage site. So the question is
    what's the development of the Commission, the status? What's
    your evaluation of what the Energy Committee is doing? In the
    energy authorizing committee, we have proposed something of
    that sort. Are you considering recycling spent nuclear fuel to
    reduce the volume? So give us your thoughts about what is
    behind shutting down Yucca Mountain.
        Secretary Chu. There's a first draft of names that are
    beginning to be circulated among the White House personnel
    people. We will be circulating them among Congress also for
    comment. The authorization committees, Chairman Bingaman and
    his committee, is I think--we're essentially in sync, in terms
    of trying to develop a very measured, intelligent, deep group
    of people that can actually step back and say that there are
    options available to us today, and looking down in our crystal
    ball and tea leaves 50 years from now, 20, 50 years from now,
    we can see other options.
        So now is a good opportunity to say--to charge the
    committee. There are options. I personally feel that if we do
    it right, we can develop ways of processing nuclear fuel to
    recover much more of the inherent energy value of that stuff,
    perhaps--through recycling, but we need to develop processes
    that are economically viable and proliferation resistant.
        So if that's true, and I think there's a reasonably good
    chance we can do this in the coming decades, then we would want
    to have two different types of storage--an interim type of
    storage, where you can then either get back the access,
    reprocess the fuel. We also want to be investing in types of
    reactors that can help burn down this fuel, and especially
    the--waste, so we can greatly reduce the waste.
        Now, having--after you've done all that, then there comes a
    point where you say you might not want to have access to, after
    you've burned down a considerable amount of the energy value.
    So then a permanent disposition might be called for. But these
    are things that the Blue Ribbon Panel should be discussing. And
    it's the hope that with their advice to both the administration
    and the Congress, we can formulate a path forward that I think
    could be much better than the one we're currently on.
        Senator Dorgan. I'm going to reserve the remainder of my
    questions until the end. Senator Bennett?

                                 NUCLEAR POWER

        Senator Bennett. Thank you, Mr. Chairman. Mr. Secretary,
    let's continue this conversation about nuclear power. You've
    testified several times, and again today, in your support of
    nuclear power. And I'm delighted with that, because I'm a
    strong proponent myself. The budget fails to demonstrate any
    urgency, in my view, particularly deploying state-of-the-art
    reactor technology. And the rest of the world is investing in
    new reactors. Russia, France, India, all beginning to line up
    countries to sell their reactor technologies.
        Now, the United States is clearly the leader in terms of
    safety. There have never been lives lost. There's never been a
    problem with the American reactors. So that raises the question
    of why we are not the export leader in this business, but these
    other countries are.
        So would you be willing to support additional funding for
    the NP2010 program if it improved U.S. export competitiveness
    and accelerated the deployment of new reactors domestically?
    That would, I believe, create thousands of new jobs in the
    United States. Is that something that you could be supportive
    of, if this subcommittee moved in that direction?
        Secretary Chu. Well, in terms of NP2010, there were two
    reactors that we initially were supporting, the AP1000, the
    Westinghouse reactor, and the GE reactor. It is my
    understanding that the orders for the GE reactor have shifted,
    and it's not clear. And so while that reactor is still going
    forward in a much different pace--and so a decision was made
    until we get strong signs from General Electric that they were
    going to go ahead and push this because of the recession,
    because of a shifting of orders, for example, from the GE
    reactor to the Westinghouse reactor, the support of the
    licensing of that reactor didn't seem to be as high a priority.
        So I do want very much to restart the nuclear industry.
    We're in a final review of a number of proposals for the loan
    guarantees. And so that's something that has a very high
    priority with me. This specific reactor, the GE reactor, and
    the extension of 2010 will really depend, in large part, on
    what General Electric--how aggressively they want to move
    forward on it as well.

                                LOAN GUARANTEES

        Senator Bennett. I see. Let's talk about the loan
    guarantees for a minute. In the bill that left the Senate,
    there was a very hefty increase in loan guarantees. It did not
    survive with the conversations in the conference. Those of us--
    well, I won't say those--I was subjected to some fairly heavy
    criticism on the part of people who said, ``Well, the loan
    guarantees should not include nuclear. The loan guarantees
    should be entirely for wind and solar and that sort of thing,
    and you shouldn't include nuclear in there.''
        The Department's issued five solicitations under the Loan
    Guarantee Program, and in four of the five, demand vastly
    exceeded the available supply. Now, would you be open to having
    the Congress change the law so that you could shift from one
    pattern to the other, if there's one that's undersubscribed,
    and make that money available to others? And do you still
    support the idea that under the loan guarantees, nuclear has to
    be included as renewable, in the sense that we are defining as
    renewable something that is not emitting carbon?
        Secretary Chu. I absolutely support the idea that within
    the loan guarantees, restarting the nuclear industry should be
    supported. Right now, the $18.5 billion can probably help start
    three of their four applications. We're looking as to whether
    there can be some cost-sharing with non-Federal loan guarantees
    from abroad in order to fund four. I think that's a start. I
    personally would like to see a bigger start.
        Senator Bennett. Well, the request for $93 billion for the
    $18.5, so there's obviously a great deal of interest in it. And
    my concern is that if you have other areas under loan
    guarantees where the requests are below the amount available,
    that you be given the authority to shift money from that and
    make it available to nuclear. Is that something you would be
    supportive of?
        Secretary Chu. I think in general, philosophically,
    absolutely yes. But I think to balance that, there is a fear,
    because the cost of nuclear is so high, that there is a fear
    that if you were allowed to shift the money, that it could
    easily gobble up a lot of the things of the lower cost
    renewable energy projects. So there should be a balance there,
    but having the flexibility to make those decisions, I would
    welcome.
        Senator Bennett. Okay, one last question. We've talked
    about the stimulus package and the amount of money that's
    available. Can you give us a path as to how quickly some of
    this money can be moved out? It has not moved as rapidly as
    many people thought that it should. And are those people just--
    their expectations are too high, and you're moving the best you
    can? Or have you run into problems? Or is there a holdup where
    we can be helpful? Can you give us the timeline? Just give us
    an overall view of what's happening with all of the money that
    got appropriated to----
        Secretary Chu. I think the progress in the loan guarantees
    has been actually very good since when the new administration
    took over. When I took over initially, I was told that the
    first loan, which was authorized by----
        Senator Bennett. Not just loan guarantees, but generally,
    the President--you have $38.7 billion appropriated, and you
    spent 1 percent of that.
        Secretary Chu. Okay. That's right. So in many of the
    programs we're doing, we're on target. We have a schedule that
    we want to have allocated 70 percent of that Recovery Act money
    by Labor Day. There's an issue here because in many of the
    things that we do, we request for proposals. We have to review
    the proposals, and then we have to make decisions.
        So in order to do this, there's going to be a massive
    review this summer of many of those programs. So we've gotten
    clearance from OMB, apportionment of many of these things. And
    so the allocations, we hope a lot of them can be made by this
    Labor Day. So, so far, there has been $4 billion obligated to
    date, about 10 percent.
        Senator Bennett. About 10 percent. Okay. So, Labor Day is
    an updated timeline when you will have, what, 70 percent of it
    spent?
        Secretary Chu. Well, by spent, what we're saying----
        Senator Bennett. Or obligated?
        Secretary Chu. Yes, we're trying to get to that obligation
    period by that time. That's correct.
        Senator Bennett. By Labor Day. And are there any accounts
    that you see that might, in fact, lower the amount you'll have
    to spend in fiscal year 2010 as a result of the normal
    appropriations?
        Secretary Chu. Sorry, I didn't quite get the question.
        Senator Bennett. If you have the backup of stimulus funds
    that you've been unable to spend and then those get spent
    during fiscal year 2010, does that mean there is any fiscal
    year 2010 money that can, in fact, be delayed until fiscal year
    2011 because you simply can't physically spend it?
        Secretary Chu. Right. Well, we're going to be trying to do
    our best to satisfy the statutes of that Economic Recovery,
    which is really to have it essentially obligated--100 percent
    of it obligated by 2010, and a large fraction of it spent. But
    as you know, there--in some of these things that we're doing,
    in order to lay the foundation for a new energy economy, it's
    not as though it's money instantly into supplemental check----

                                 RECOVERY FUNDS

        Senator Bennett. Oh, I understand that. But you understand
    the angst that is out there among our constituents about the
    amount of money in total the Federal Government is spending and
    the concern that it may not be spent wisely. And if, as you
    move forward in your pattern to say, ``Okay, this is the proper
    timetable and the proper method of spending stimulus funds,''
    and you discover that in doing that, it means that you do not
    need as much of the 2010, in terms of--speaking in business
    terms now--actual cash flow. I'm not talking about changing
    your plans or changing your research programs or your targets
    or something.
        But there becomes a physical question of pushing the money
    out the door. And in terms of actual cash flow in 2010, you
    can't prudently do it----
        Secretary Chu. Right.
        Senator Bennett. Would you share with the subcommittee
    those funds that might be pushed onto 2011?
        Secretary Chu. Yes, I could share those concerns. But we
    are looking at novel ways of addressing this. It is a--you're
    quite right to say that this is a Herculean task. It more than
    effectively doubles our budget. And so, for example, I have
    sent a letter out to all the presidents of the major research
    universities, the relevant deans, the presidents, and the
    executive chairs of all the relevant professional societies, to
    say that we're going to have essentially a review-fest over a
    period of one week in Washington, asking them to nominate for
    this summer their best people to help us review these
    proposals. We cannot do this alone with our current staff. And
    so we're looking at things like that in order to get this
    moving.
        Senator Bennett. Okay. Thank you very much.
        Senator Dorgan. Senator Bennett, thank you very much. I
    have just been called by Senator Reed, the majority leader, to
    go to the floor to negotiate an amendment that they're trying
    to clear before they do final on this, in the bill that's now
    pending. So I've asked Senator Murray to chair while I'm gone.
    And let me call on Senator Alexander. We're recognizing
    Senators in order of appearance at the hearing.

                                INNOVATION HUBS

        Senator Alexander. Thank you very much, Mr. Chairman. Mr.
    Secretary, welcome. On May 9, 2008, I made an address at Oak
    Ridge Laboratory about a new Manhattan project for clean energy
    independence, seven grand challenges for the next 5 years:
    plug-in cars and trucks, carbon capture, solar power, nuclear
    waste, advanced biofuels, green buildings, and fusion. So I
    like your hubs. I think that's exactly the way to go about
    these grand challenges.
        I have a question about a relatively small item. In the
    America Competes Act, which you had a role in developing the
    recommendations for, there is a provision for distinguished
    scientists who would have one foot at a university and one foot
    at a national laboratory. It's worked well at Oak Ridge, for
    example, with the University of Tennessee over the last 20
    years.
        There's authorization for up to 100, was the idea, to be
    phased in over a period of time, and there's the authorization
    for $30 million of spending, none of which is funded yet in
    this budget. I just want to call that to your attention in case
    it does get funded to suggest that moving ahead with those at
    the rate of four or five a year might be one way to advance
    these hubs, as you're looking to attract very talented people
    to focus their attention on those. Have you noticed this?
        Secretary Chu. Actually, first, let me just say I support
    the idea. I think having intimate collaborations from
    universities and national labs is something I'm very supportive
    of. I would be encouraging--although one doesn't see it
    specifically in a line item of a budget, one is beginning to
    see this in the national labs, and I would be encouraging the
    national labs to grow much stronger relationships with
    surrounding universities. It serves both the university and the
    national labs very well. It brings in a lot of young blood. It
    creates a churn and intellectual excitement.
        So while it doesn't have to necessarily show up in a line
    item, I will be encouraging all the national labs to do just
    that within their programs.
        Senator Alexander. And this authority isn't earmarked to a
    particular university; it's for the Secretary to compete and do
    it in whatever way is right. I would like to explore the
    questions that Senator Dorgan and Senator Bennett raised about
    nuclear power.
        The President, in his inaugural address, talked about power
    from the earth, the wind, and the sun, and that's captured the
    imagination of a lot of people. But it's less than 1\1/2\
    percent of our electricity today, and if we double it or triple
    it, we still don't have much. And even if we reach the 15 or 20
    percent that some people think we might of renewable power,
    that's probably it, and that still leaves a need for 80 or 85
    baseload power.
        I thought the President's rumored proposal today of capping
    greenhouse gases from tailpipes by a low-carbon fuel standard
    was a good idea. I think that it makes sense because that will
    encourage switching to an existing technology, such as electric
    cars. We have enough--we could plug in, Brookings says, half
    our cars and trucks, without building one new power plant, if
    we do it at night, we have so much unused capacity.
        If we look back at the beginning of the cap-and-trade
    program in 1990 and 1991, we had an existing technology then
    for dealing with the acid rain. We had scrubbers that would
    take care of that. Where I'm going is, as we move along in the
    greenhouse gas discussion, we probably get next to coal plants,
    which are 40 percent of the carbon. And we don't have an
    existing technology to deal with that, except nuclear power,
    and with a limited amount of experience with burying carbon
    underground.
        So why wouldn't we be as aggressive about expanding nuclear
    power and doubling or tripling research in Manhattan project to
    find a way to get rid of the carbon in existing coal plants as
    we are with wind and solar and other so-called renewable
    powers? They're not baseload powers. And isn't it true we have
    to have some new source of clean baseload power? Why not just
    put a plan in to build 100 new nuclear powerplants in the next
    20 years as a start toward that and double or triple research
    to take carbon from existing coal plants?
        Secretary Chu. Well, as enthusiastic as I am about nuclear
    power, that number, 100, would be a lot. It would be a huge
    challenge to our nuclear industry. I think I've repeatedly gone
    on record as saying, as you well know, that this
    administration, this Department, the hopefully soon-to-be
    confirmed members of my team are all enthusiastic about it.
    They say it is a necessary part of our baseload power.
        I agree with you, if you're going to go above 15, 20, 25
    percent renewables, there are real issues having to do with the
    transmission and distribution system, having to do with
    storage. The storage problem is especially an unsolved problem,
    but there are options, and so we'll be looking at, for example,
    pumped hydro, where it's appropriate in certain regions.
        But I reiterate the fact that we're blessed with a lot of
    coal, and although we do not have today the technologies that
    would make capture and sequestration of coal economically
    competitive, I think there's a good chance that we can get
    there. And so I'd prefer to take a different stand and say
    let's push all of these things as hard as we can.
        The nuclear industry, if you look at the capacity of their
    ability to build reactors, it's not there today, and so while
    we want to move aggressively ahead on that, I think we still
    have to try to move aggressively as we can on developing the
    technologies for capture and sequestration.
        Senator Murray [presiding]. Thank you, Senator Alexander.
        Senator Alexander. Thank you, Madam Chairman.
        Senator Murray. We'll move to Senator Tester.

                             LOAN GUARANTEE PROGRAM

        Senator Tester. Yes, thank you, Madam Chair, and thank you
    for being here, Secretary Chu. A couple of things, going back
    to some previous questions, I certainly appreciate the
    situation you're in and that there is a sizable sum of money
    available to you to send out. But I also appreciate the fact
    that you're taking the time to make sure we get the results
    from this. It's just not money spent for the sake of spending
    money. And I think there's a real urgency in generation and
    transmission in this country, as the questions before me have
    pointed out.
        I want to go back a little bit to the Loan Guarantee
    Program. You talked about a massive review--I don't know if it
    was of that program or not. But just can you tell me where we
    are as far as the decisionmaking process of that Loan Guarantee
    Program, and what is the timeframe for getting some of the loan
    guarantees out the door?
        Secretary Chu. Okay, so we've made a provisional grant to
    one company. That means that they have to find funding for the
    current statute for the 20 percent. This is middle May. I think
    by the end of this month, we'll be announcing a number of
    others. We've greatly accelerated all the review processes and
    how we do it, and we're doing many things in parallel now,
    something that the Department is not used to.
        And so the loan guarantees essentially are being
    accelerated by about a factor of 5, maybe closer to 10. So this
    is a very significant focus on making sure that these things
    are reviewed, reviewed adequately, but very quickly.
        Senator Tester. Okay. So you're anticipating some
    announcements--because we are in the middle of May----
        Secretary Chu. Right.
        Senator Tester [continuing]. Any day?
        Secretary Chu. Certainly within the next couple weeks to a
    month, yes.

                                  WIND ENERGY

        Senator Tester. Okay, all right. We have great wind
    resources, particularly in the eastern part of Montana. And
    what has traditionally happened over the last 4 or 5 years is
    they've built a lot of towers in a fairly small area for
    purposes of maintenance and construction, cranes, all that
    stuff. It looks to me like the best benefit you can get out of
    wind is if you decentralize it, if you move it around for
    intermittency purposes. The wind's blowing somewhere in eastern
    Montana every day, all the time, and the issue is the grid.
        Do you ever put forth policies or put forth direction to
    electrical generation companies to encourage them, or is there
    anything we can do to encourage that, or is that even a good
    idea? I'm talking about decentralization of wind to reduce
    intermittency and reduce the need for--go ahead.
        Secretary Chu. No, that is a very good idea. In fact, a
    number of Cabinet-level people have been meeting on an every-
    other-week basis. The principals--meet--this is Interior, Ag,
    Energy, CEQ, a number of stakeholders--to try to develop a
    coherent plan where the energy resources, both solar and wind,
    where are the places where it would not be--we have to be very
    sensitive to environmental concern and danger species, things
    like that, and trying to now develop this--FERC is also, of
    course, part of this. And we're trying to then develop this and
    start to work with the private sector.
        Senator Tester. So you have the ability to give some
    direction?
        Secretary Chu. Well, we're----
        Senator Tester. Or we need to do it at this level?
        Secretary Chu. Well, we are trying to develop some plan
    that gets buy-in from the private sector.
        Senator Tester. Okay. That's the best.
        Secretary Chu. The meetings have been going on for several
    months.

                          CO2 SEQUESTRATION

        Senator Tester. A few weeks ago, this subcommittee had a
    hearing on beneficial use of CO2. We heard some
    pretty encouraging things about algae. One that was
    particularly encouraging to me was cement, making cement, not
    having to separate the flue gas. It sounded to me like it was
    tricked out and ready to go.
        Two questions, No. 1, is that kind of specialty use of
    CO2 something that you see as viable and is it
    something that can happen? And then the follow-up question is,
    is the beneficial reuse of CO2, is it being limited
    by our study of carbon sequestration and storage?
        Secretary Chu. We are certainly looking into those things--
    the algae converted CO2 into lipids that can be used
    for transportation fuel and cement. The verdict is not in
    whether these processes work but if they could go to a scale
    necessary to be significant, and so we're looking very hard
    into this. I do know other countries also are looking into--for
    example, I just had a discussion with some representatives of
    China. They're keen on seeing whether this can actually work.
        But again, we're in the process of trying to study whether
    it can really go to scale or whether it will be a small, more
    boutique type of thing. Cement especially is something that
    goes in several stages. There are various grades of cement and
    long before you can actually get into a structural cement there
    are many issues having to do with structural integrity. The
    economic viability is something--it's--but these are fairly new
    ideas, and so we are very interested in looking and seeing if
    they can really work.
        Senator Tester. Do you think the budget's adequate enough
    to deal with the CO2 issue, generally speaking, both
    as beneficial use and as storage? Is this an adequate budget to
    deal with that?
        Secretary Chu. I believe it is. I think we're upping,
    actually, the funding in algae, and cement, there are a couple
    of companies looking at this, in terms of supporting that with
    loan guarantees.
        Senator Murray. Thank you, Senator Tester. Senator
    Feinstein.

                               DESERT PROTECTION

        Senator Feinstein. Thank you very much, Madam Chairman.
    Good morning, Secretary. It's good to see you here. I've tried
    to obtain an appointment with you. So far, I've not been able,
    so I'm going to take this opportunity to express a concern
    publicly that I would have expressed privately, had I had the
    opportunity.
        You may not know this, but I authored the Desert Protection
    Act in southern California. We created two new national parks,
    Joshua Tree and Death Valley, and the Mojave Preserve. Since
    that time, for about the past 7 years, we've been trying to buy
    railroad inholdings to put them into conservation and have in
    effect bought about 700,000 acres in a very unique public-
    private partnership. The private sectors contributed $40
    million, and we, about $17 million, to be able to do that.
        So it was much to my consternation that I was suddenly told
    that a lot of large solar facilities were going on the land
    that we had just purchased with a lot of private money to
    conserve. So I went down to the desert and brought the
    companies involved and took a look.
        And here's what I found, that I saw seven projects. They
    totaled nearly 60 square miles, 60 square miles. One was 9.3
    square miles. One was 7.03 square miles. One, 15 miles square,
    that's BrightSource, Iberdrola, 3.09, the second Iberdrola,
    another 3.09, PG&E, 6.56, and Solal, 6.25, and many of them in
    this land that is due for conservation and that had been
    purchased for the purpose of conservation.
        Then I began to look, and I talked to Southern California
    Edison, ``What's your largest solar project?'' 50 megawatts.
    And I see here, we've got 914, 815 megawatts, 500, 500, 500,
    800, 600, huge projects. And I asked how was this done? Well,
    the national topography of the land is leveled out. The sand is
    removed. A gravel surface is put in. The solar troughs are
    centered. You need a large steam plant, and you need very large
    transmission lines.
        The question comes, for me, having tried very hard over 16
    years to protect this area of the desert, now to see it all in
    the main going for a huge number--now, I'm only talking about 7
    out of 65 projects for the area. Those were the only ones I
    saw. But the ones I saw were 60 square miles' worth of solar
    troughs, huge steam plants and fences that will go around it.
    Right in the middle of a desert where the desert tortoise has
    some habitat, where there are other problems--bighorn sheep,
    Indian petroglyphs, and so on--and we've been able to clean up
    this desert over time.
        The question I have is should we not cap the size of these
    things? The largest that I know of is in Kramer Junction. Two
    projects, one 160 megawatts and one 150. Each one is about 2
    square miles. Those are the largest I know of anywhere in the
    United States. And now we're talking about one of 15 square
    miles. Should we not cap the size of these?
        Secretary Chu. Well, I certainly would be willing to--
    first, I'm a little bit surprised if you asked to see me and my
    staff said no.
        Senator Feinstein. Well, we just haven't gotten a response.
    That's sort of the way it's done. You just don't hear.
        Secretary Chu. Oh.
        Senator Feinstein. But anyway.
        Secretary Chu. I'm still surprised. You actually have my
    private number.
        Senator Feinstein. Well, I should call you at home, then.
        Secretary Chu. But I'd certainly be willing to talk to you
    about this. These are sensitive issues and we have to think
    hard about them. I don't know--I was actually just informed
    only a few days ago about this concern and I'd certainly be
    willing to look into it.
        I think this is one of those very delicate issues, as I was
    saying to Senator Tester, as we are developing a plan moving
    forward in conjunction with the other Secretaries, one of the
    issues is the sensitivity to habitats of endangered species
    that we're looking at, and we're trying to make sure that we
    fold all those concerns into where there would be good sites
    for solar and wind.
        Senator Feinstein. My time is up. Let me say one more
    thing. In my State, I have 47,000 abandoned mines. People came
    in, they mined, they took the stuff they wanted and they walked
    away from the mines. Solar technology is going to change. In
    Daggett, I've looked at some photovoltaics and solar troughs.
    They walked away from them. They left the steam engine there,
    steam plant there. This has to be considered as well.
        Everything right now is how you can do it the cheapest
    possible way you can. Huge is better. But I've got to tell you,
    I'm going to fight for this land to be protected. And I think
    that size is a factor, and you just can't come in and build 15
    miles square facilities with huge steam plants. We're willing
    to do our share. I am. I understand the desert is a good place
    for it. But the sky's not the limit, Mr. Secretary, and that's
    what I want to say. Thank you, Madam Chairman.

                                 WASTE CLEANUP

        Senator Murray. Thank you, Senator Feinstein. Mr.
    Secretary, thank you. You and I have spoken on several
    occasions about the legal and moral obligation for the Federal
    Government to clean up the waste that was left behind from
    World War II and the cold war. We've talked about it prior to
    your confirmation, at the Budget Committee hearing, and again
    after the release of the 2010 budget proposal.
        My position is really clear, and the administration is
    going to have to expect it to remain consistent, because that's
    what I want for these budgets. I want budgets that clearly meet
    the obligations we have to the Nation and the States and the
    communities that are home to those cleanup sites. And I want
    budgets that consistently make progress toward the goal of
    cleaning up that waste.
        The funding highs and lows that we see just don't get us
    there, and unfortunately, that's what I see in the EM budget
    we've been presented with. Let me talk about the highs. In the
    Office of River Protection, it's good to see an increase for
    the work at the tank farm. We have seen years and years of
    pushing off those infrastructure needs, and there's a lot of
    work that needs to be done there. You're putting your focus
    back on that work, and I do appreciate that. I expect that we
    can remain consistent, and we'll look forward to that as the
    new base level of funding for those tanks. That's really
    important.
        However, the same effort isn't evident with Richland
    Operations, where there's a reduction in funding below the
    fiscal year 2009 and fiscal year 2008 appropriated amounts.
    That reduction does not represent a consistent effort for
    stable and compliant budgets. We all have to remember that the
    economic recovery funds were meant to make up for lost time and
    to create good-paying jobs, not to make amends for this year.
        The River Corridor Closure Project is up; however, the
    Central Plateau is down. Reducing the active cleanup footprint
    at the site is a really large task that requires consistent
    budgets to fund the effort. So I encourage you to keep that in
    mind when you're planning for next year's budget so we don't
    get ourselves back into this position again.
        As you know, Hanford is not going to be cleaned up in 5 or
    10 years. It's a large project, massive in size, and we need to
    manage it thoughtfully and consistently with that long-term
    mission in mind. And that's why I am always saying we need
    stable and consistent budget, so we can get the job done
    safely, No. 1, and successfully.
        I also wanted to just quickly mention to you the Hammer
    Facility that is on site at Hanford. The Hammer Facility offers
    incredibly wonderful training for people who take on the very,
    very dangerous work of cleanup. And I'm hopeful that when you
    do come out to visit the Hanford site, that you'll get the
    opportunity to stop by and see Hammer, see what they're doing,
    to help promote a safe working environment at a very, very
    challenging place.
        I'm still looking forward to your visit at some point in
    the near future, where you can see progress on the site, but
    also, some of the worker safety training going on at Hammer and
    at PNNL and how everything works together towards cleanup.
        I do have a number of detailed questions for you on support
    for Hammer and the B reactor. I'll submit those for the record.
    But I do have a question for you while you're here, Mr.
    Secretary. I do want to say that I'm pleased at the overall
    increase for energy efficiency and renewable energy. We've got
    to move forward on a clean energy economy. And I think that
    does help us keep on the path.
        Now that you have spent some time at the Department, I'm
    looking forward to hearing an update on the Water Power
    Program. As you know, that program got $40 million in 2009, and
    the President is now requesting a 25 percent reduction, which I
    am very concerned about. I think we have to have a very strong
    continued investment in existing hydro facilities that will
    allow us to use those to supplement the more unpredictable
    sources, like wind or solar. And I think we have to increase
    our work to develop new marine and hydrokinetic technologies,
    as well, that you and I have talked about before.

                                  WATER POWER

        So with my less than a minute left could you talk to me a
    little bit about your vision for the Water Power Program.
        Secretary Chu. I think, first, very briefly, I am very
    committed to continuing the cleanup as aggressively as we can
    and looking for better ways of doing that. It's not only the
    money, but it's also the way it's invested and funded. And so a
    lot of time is now being spent in reviewing how we deal with
    the contractors, making sure that they do the job in a timely
    manner.
        In terms of the water projects, it's too late to start this
    in 2010, but in the 2011 budget, I'm a big advocate for looking
    at ways of being, let me just say friendly to the fish, but
    allow us to continue hydropower, but also to look at the
    possibility of actually having some pumped hydro, small amounts
    of sources, so that we can actually couple the renewable energy
    better. And so we're going to be looking very hard at that.
        Senator Murray. Okay. I look forward to working with you on
    that. I think it's extremely important. And I appreciate your
    response. Senator Cochran.

                          STRATEGIC PETROLEUM RESERVE

        Senator Cochran. Mr. Secretary, welcome to the
    subcommittee. We thank you for your cooperation and your
    service as Secretary, a very important position. In the budget
    request for the Strategic Petroleum Reserve, roughly $50
    million is included and proposed for the purchase of a new
    cavern to replace an existing storage cavern that was said to
    pose an extreme environmental risk. And this is for storage of
    strategic petroleum reserve.
        There are salt domes in my State of Mississippi which some
    think are ideal sites for the storage of the petroleum reserve.
    Your Assistant Secretary recently testified about legislation
    to increase storage capacity, specifically for the strategic
    petroleum reserve.
        I'm curious to know what your thoughts are about choosing
    caverns that some say are not environmentally appropriate for
    storage, rather than looking into the possibility of salt domes
    that are coincidentally located in southern Mississippi. I'm
    just curious to know if this has reached your level for
    attention and consideration.
        Secretary Chu. Well, my understanding is that one cavern,
    which I believe is the salt cavern--it wasn't understood that
    the thickness of the salt was, in one section of it, thin
    enough that it could open up the possibility of a breach and
    can actually--the petroleum could leak into the environment.
        And so that was discovered, in my understanding, last year,
    year and a half. And so once it was discovered, it was decided
    that that posed an environmental risk and we should go out and
    purchase some property to put it in a place where the envelope,
    if you will, would be less likely to be breached. And so that's
    what we're in the process of doing, but salt caverns are
    actually used for that, as you well know.
        Senator Cochran. Right. Well, I was just curious to know
    whether that reached your level for your personal attention. I
    don't have any fixed views about which caverns are the best or
    not the best, but we certainly want to be sure that they are
    safe in terms of environmental consequences, and certainly in
    respect to possible damage to people who live in the area.
        Funding, incidentally for the strategic petroleum reserve
    included $35 million for a site near Richton, Mississippi,
    contingent on a report issued by the Department within 45 days.
    My staff has contacted the Department about the report, and
    we're just curious to know what the status of that report is,
    if you know.
        Secretary Chu. I don't know. I could get back to you on
    that and give you the details.
        Senator Cochran. We would appreciate that, and we would
    like to be kept in the loop, as long as you have active
    consideration of Mississippi sites. Or I know in Louisiana,
    they have some salt caverns there as well. But it's of
    importance. We want to be a positive contributor to the solving
    of our energy problems, and we think that there are some
    caverns that possibly could be suitable, and we'd like to
    know--there was a report, I think, contemplated at one time to
    describe and define this, so the general public would have some
    better ideas of what's going on. Rumors get started, and I
    would like to know what the facts are so I can pass that on to
    my constituents. If you could look into that, I would
    appreciate it very much.
        Secretary Chu. Sure, I'd be delighted to.
        Senator Cochran. Thank you. Thank you, Madam Chairman.
    Sorry, Mr. Chairman.

                                   GEOTHERMAL

        Senator Tester. Oh, that's entirely all right. I'll ask a
    few questions here, waiting for Senator Reed to go here. Real
    quick, do you think that there's any future as far as
    geothermal goes in relation to baseload power, or is it
    economically not going to happen?
        Secretary Chu. I think there is a real potential,
    especially enhanced geothermal. But we're looking--geothermal
    right now is on .3 percent of our electricity generation
    capacity in the United States.
        Senator Tester. But we have incredible resource.
        Secretary Chu. We have incredible resource. It's mostly--my
    understanding, it's mostly in the ability to do enhanced
    geothermal, meaning that you pump in water or carbon dioxide
    that uses the heat transfer fluid. We know how to fracture rock
    much better than we did before, and so this is a possibility.
        We are going to be investing in research to see whether
    enhanced geothermal can actually be viable. If it is viable,
    there is a very large resource.
        Senator Tester. How many years out do you think it is,
    before the first viability?
        Secretary Chu. I'm trying to think of the briefing, but
    these things are issues where you're going to--it's, again,
    there's--it takes time to drill. It takes time to test it. Ten
    years. I don't know.
        Senator Tester. Okay. Senator Reed.

                           WIND AND GRID INVESTMENTS

        Senator Reed. Thank you very much. Mr. Secretary, thank you
    for joining us today. I know you are aware that my State of
    Rhode Island is aggressively trying to deploy wind-powered
    facilities off its coast in State waters near Block Island and
    in Federal waters further out. This is not only going to
    provide us with, we hope, renewable energy resources, but also
    provide a stimulus to our manufacturing sector, producing the
    blades to turbines and other equipment.
        One of the concerns we have is that the investments that
    you are leading in terms of the grid might focus the attention
    away from these projects along the east coast and more toward
    the center of the country. And I would just ask you to sort of
    ask us how these grid improvements can help and not hinder the
    development of these wind projects. And it's not just Rhode
    Island. It's Delaware. It's all up and down the--Virginia, all
    up and down the coast, this sector.
        Secretary Chu. Well, you're raising a very important point.
    The Atlantic Coast has a lot of wind resources, very close to
    population centers. And we are--certainly this is part of us,
    as we get out feet wet, so to speak, in finding out how to
    develop the wind resources.
        I think it's important to actually develop them in both
    places. The more diverse the set of wind resources, not only in
    Montana, but all over the United States, the better we have of
    actually becoming more base load. So to have wind resources off
    the shallow Atlantic Coast and having it in the Northern
    Midwest, they're very important.
        So in talking to power distribution companies, utility
    companies, it's not clear to them what the best economic
    investment is either. So we're trying to work through this. The
    issue with offshore is that for shallow offshore, it's about a
    factor of two more expensive initial investment. Even more so--
    perhaps a factor of three or more--in the maintenance, and so
    far, the maintenance is higher than expected in the European
    experience. And so we are trying to work through all of these
    things. Hopefully within several years, we can get the wind
    turbines so that the gear boxes, the blades, are much more
    robust.
        But so these are all issues. Going offshore actually
    complicates that.
        Senator Reed. Yes, indeed. I think, though, that--and I
    don't want to suggest a response, but it seems that there
    should be a very explicit recognition of these offshore efforts
    and coordination as you invest in the grid. It would help
    either inadvertently or directly see huge investments, which
    make it even more difficult to bring this power----
        Secretary Chu. No, I agree with you. I think it should be a
    balanced view, and how to develop the renewable resources at
    large in the United States in the most balanced way. And in our
    little group of secretaries and other administrators, this is
    very much on the table, the balance between Atlantic offshore
    and Midwest, for example.
        Senator Reed. And principally FERC and the Department of
    the Interior will have the principal roles of the siting, et
    cetera. But I presume the Department of Energy will be an
    active participant, from your comments.
        Secretary Chu. Yes. But you said it correctly FERC and
    Interior will have the major roles in deciding.

                                 WEATHERIZATION

        Senator Reed. Let me--I have at this time, one final topic.
    And that is thanks to the efforts of Chairman Dorgan
    particularly, there's been an unprecedented investment in
    weatherization in the Recovery Act. And then the 2009
    appropriations bill has $450 million to complement the roughly
    $5 billion in the Recovery Act. But the 2010 budget has only
    $220 million for weatherization. Now, I understand some of that
    is because of a big spike up, and you're coming down. But there
    is a concern that we're ramping up this capacity of
    weatherization. We're getting people out there, particularly in
    the context of recovery, those are good jobs, and then we're
    going to see the funding streams diminish rapidly, leaving us
    with capacity and people, but--and still with demand.
        So I wonder if you could just give us the notion of what's
    your long-term strategy for weatherization, Dr. Chu.
        Secretary Chu. Yes, Senator, you were actually raising a
    very good point. Because in the weatherization, roughly $10
    billion is, in the Recovery Act, spread around several
    agencies. Part of that is actually building a workforce that
    can weatherize, and after 2 years or 2\1/2\ years, what do you
    do with this workforce?
        So I think what we are very concerned about, in trying to
    design self-sustained programs beyond that. Let me give you one
    example. Secretary Donovan and I are looking for ways in which,
    when properties change hands, when you buy a home, that you can
    have financing, additional financing, say an extra $10,000,
    $15,000 that's part of your mortgage that, if done right, that
    financing could actually decrease the cost of running your
    house, because the money you save in lower utility bills will
    be more than compensative for the additional little bit of
    mortgage.
        Now, when you sell your property, it's--okay, the
    investments are there. And so that helps overcome the initial
    hurdle of capital that is very important. This weatherization
    could cost $10,000, $15,000 for middle-class homes. It also
    gets the middle class into this.
        We're also looking at programs where banks could be
    encouraged to again for the affordability of the house, ask
    that, in addition to a termite inspection, they ask for the
    utility bills from the gas and heat. And in that section of the
    country, this is the spread of utility bills per square foot
    for average house. So just like a refrigerator label, this is
    the spread--the home you're thinking of buying is here or here.
        This does--first, no taxpayer money. Very little
    transaction cost, but it motivates several things. You get a
    more informed consumer. You actually give incentive to the
    current homeowner to weatherize, to increase the resale value
    of the home. And you actually--then there's an incentive. It
    also helps the new home builders who are reluctant to put in
    energy efficiency. One can predict the energy efficiency of
    those new homes, and they look much better. And so you
    stimulate in many ways, just by the simple transaction that
    seems to me logical, in the sense that what a bank really cares
    about is the affordability of the home. It includes the taxes.
    It includes the mortgage rate. It includes the utility bills.
        So there are things like that we're looking to do--and
    revolving funds yet another one, so that we actually get this,
    1 million or 2 million homes is just the beginning. We need to
    get this self sustaining in a very deep way. So these are some
    of the programs we're thinking of piloting and testing.
        Senator Reed. Thanks very much, Mr. Secretary. Thank you,
    Mr. Chairman.
        Senator Tester. Thank you.

                              HYDROGEN FUEL CELLS

        Senator Dorgan [presiding]. Senator Reed, thank you very
    much. Mr. Secretary, again, I regret that I was called over to
    the Capitol, but I appreciate your answering the questions of
    my colleagues. Let me go back to the issue of hydrogen. I want
    to ask a number of questions then we will let you be on your
    way.
        The hydrogen fuel cell issue has been a part of the
    Department of Energy's portfolio for well over a decade now. In
    2006, the Department of Energy developed and released the
    hydrogen posture plan. It laid out a 15-year strategy for
    hydrogen and fuel cell research, development, demonstration,
    and deployment.
        Since about 2001, roughly $1.5 billion has been invested by
    the Federal Government in hydrogen and fuel cells, and industry
    and the States are estimated to have spent somewhere in excess
    of $4 billion. My understanding, from the experts who know, is
    that these programs have met their cost and their technical
    goals. Research has kept pace with key milestones established
    in the hydrogen posture plan.
        So, again, I don't understand. Let me be more specific. Do
    you come to us saying you want to shut down these research
    projects in the middle of the research? Is that what the budget
    is asking us to do?
        Secretary Chu. Well, it is a shifting of priorities. I
    would be very happy to talk to you about this and discuss this.
    But certainly it was more the intent of the 2000--the concern
    in the 2010 budget was focused more on the transportation
    sector and whether hydrogen cars could become a reality in
    let's say 20 years, and whether--or do we see it further out,
    and whether we should be investing these resources in, for
    example, much more efficient internal combustion engines,
    especially, from my point of view, diesels, since the new
    advances in diesels allow diesels to now meet California EPA
    standards. They're very clean diesels, and also the plug-in
    vehicles.
        And so in terms of offsetting our imports of foreign oils,
    getting some more oil independence, really getting these things
    in the marketplace, I see those as more likely solutions in the
    next 20 to 30 years.
        Senator Dorgan. I don't disagree with that at all, but do
    you think 50 years from now, that your hope is more efficient
    internal combustion engines, more diesel engines on the road?
    Or is it your hope that perhaps we do things that are
    transformative? For example, continuing to work on hydrogen
    fuel cells that are longer term? And if not the Department of
    Energy to work on this, who?
        And then finally, you didn't quite answer the question. Do
    you really want us to shut down about I think 190 research
    projects that are in the middle of the project? And we just
    say, ``You know what? That was yesterday's money, yesterday's
    Secretary, yesterday's idea. Shut them all down.'' And you
    really want us to do that?
        Secretary Chu. Well, I'd be happy to work with you and look
    at the details of where the programs are and things of that
    nature. And we can work out----
        Senator Dorgan. I'm hoping to help you with the funding for
    these projects, by the way, because I think--well, we may not
    be around in the long term, in the long term, we're all dead.
    But the fact is the near term is not the only thing that's
    important to us. If we're going to be transformative, I think
    you look out beyond 5, 10, and 20 years.

                                WIND DYNAMOMETER

        Let me ask you, Mr. Secretary, about an issue, wind
    dynamometer that is at NREL. My understanding is that we've
    spent a lot of money to test commercial wind turbines at NREL.
    I've been there. I've seen this, big investment in hardware.
    I'm told that the DOE is now pursuing competitive solicitation
    in the private sector for a dynamometer, rather than
    capitalizing on the investment made at NREL. Are we moving away
    from NREL as a center of expertise in this area, and if so,
    why?
        Secretary Chu. Well, actually, I'll confess I don't know
    that part of it. I do know that we have this wind test facility
    at NREL and there's a dynamometer. Getting the private sector
    involved is something I think the Department of Energy is very
    interested in. So I don't know the exact details of that.
        Senator Dorgan. Would you look at that?
        Secretary Chu. Sure.
        Senator Dorgan. And my understanding is, there's some
    interest in the Department of Energy to duplicate that
    investment in the private sector up in the Northeast, and I'd
    be very concerned about that. I mean, I would hope that we
    would continue having NREL as the center of that research.
        Secretary Chu. Oh, well, there's something else--maybe it's
    this, but we are making investments in Boston, but that's a
    wind test facility. That's not----

                                    PENSIONS

        Senator Dorgan. That's not what I'm thinking of. And also--
    I'm going to say really nice things about you in a moment, but
    I do want to ask these questions. It appears to me there's
    about a $500 million to $1 billion shortfall on the pension
    side.
        Secretary Chu. Yes.
        Senator Dorgan. And I think my colleague from Utah
    mentioned that, and I didn't hear, but maybe you've answered it
    since I----
        Secretary Chu. No, I actually didn't get to that. This is
    of great concern to us. We did scramble around for a lot of the
    money. This is a serious concern. We have a lot of employees
    and former employees, and we have an obligation to them. And so
    there was some last-minute scrambling to find some emergency
    funds. It's not completely covered yet. In the long term, this
    is an obligation the Department of Energy has in the sense that
    we have a liability. I don't think any other agency has this
    liability. We have to figure out a way, for example, of having
    our contractors move toward defined contributions rather than
    defined benefits. Of course, we grandfather in all the people
    that we've had obligation to. We're not talking about that. But
    this overhanging liability is something serious, and because of
    the stock market decrease and because of the new act that says
    it has 80 percent funded, we all of the sudden got these
    shortfalls.
        We're aware of the problem. The long-term fix will probably
    have to be something like evolving toward--as we get in new
    contracts, toward defined contributions.
        Senator Dorgan. Right. So we might have some unfinished
    business on the budget side. I mean, it appears to us it's a
    $500 million to $1 billion that's a shortfall. We'll have to
    continue to work with you on that.

                              RECYCLING SPENT FUEL

        Let me ask if you could just describe again, so that I
    understand, in shorthand under what conditions would you
    consider recycling spent nuclear fuel?
        Secretary Chu. If we could develop proliferation
    resistance, something that would be unlikely that terrorists,
    if they got hold of this material, could actually work with it
    as an example, if it has some soft protection, so it doesn't
    create a stream of separate plutonium or something that's
    easily shielded.
        There's also the economic viability of the processes in
    general. We want to see industry saying there's a path forward
    which that we can really invest in these recycling plans. And
    finally, we need to develop generation IV reactors, high-energy
    neutron spectrum reactors that can burn down this waste.
        I think actually all these things are solvable. It could
    take decades, but I'm certainly interested in looking at it,
    looking at the work. There's--if we extract a lot of the worth
    of the nuclear fuel, this is a clean source of energy, baseload
    energy, and I think the waste problem is solvable, and I think
    there's a likelihood if we do it right and get a bunch of very
    smart people on it, that we can develop these recycling
    methods.
        Senator Dorgan. And I would say, as you look out there,
    decades out on the horizon exist not just this issue, but
    hydrogen as well, in the longer term. You come from a science
    laboratory, are a Nobel Prize winner, a very distinguished
    person and I feel very strongly that the administration has
    solicited the service of someone who's extraordinary. So I'm
    very pleased you're there.
        But I also know where you are. You're in the Department of
    Energy, and that's a great place. You've got some great people
    there. But it's also an area filled with superglue in some
    areas. You just slow everything down then get it all stopped.
    On the issue of loan guarantees and the things that you've come
    to in this agency, an agency that in some areas, it just is
    almost impossible to move. You can observe more movement in a
    glacier than in the Department of Energy on some issues.

                          ACCELERATING LOAN GUARANTEES

        So tell me about what you have discovered and what your
    experience is with respect to getting some of these Loan
    Guarantee Programs moving that were just dead stopped.
        Secretary Chu. Well, we discovered first, that they could
    be increased by a factor of 5, maybe even 10. The only way we
    discovered this is actually, for example, we hired Matt Rogers,
    an outstanding person from McKinsey, and by literally first
    looking at other agencies in the Government, seeing how they do
    their loan programs, and then looking at how we do it, but then
    looking step by step at everything and how you actually go
    about the business in terms of little horror stories here and
    there. They said that the amount of paper required was such
    that they were concerned of any loans below several hundred
    million dollars. They couldn't know how people could afford to
    do this because of the paperwork required, the amount of
    paperwork, 500 to 1,000 pages. We're working very hard to
    reduce that. The target is 50 pages. If you can't get your idea
    out in 50 pages, there's something wrong with it.
        In terms of vetting, many of the times, if you have a dual
    vetting process, if there's a substantial financial investment
    and a bank does some of the things, we can then cooperate and
    do that. The idea that in helping the customers, the potential
    customers, there was a strong sense that you couldn't help any
    particular customer because it would be unfair, it was giving a
    particular advantage to that particular applicant. And so we're
    turning that around and saying there's another way to be fair--
    help everyone. It's a novel thought, but we're moving ahead on
    that.
        And so what it really took after the first couple weeks to
    say, okay. The people there need a little help in seeing that
    you can actually move this considerably faster. The idea that
    you go in serially and then you get to the next point and you
    go again, it's like a long relay race. Every time you pass the
    baton, the baton's dropped.
        In actual fact, in industrial project management, in good
    project managements in the Federal Government, that's not done
    that way. You can start many things nearly in parallel. So we
    essentially are looking at every nook and cranny and finding
    that we can actually increase this considerably. And so, again,
    we went from getting the first loan out in 1\1/2\ years to
    getting the first loan out in 58 days from the time I took
    office. And so we are very anxious to see this continue.
        You made a reference to the fact that it is--the friction
    in the Department of Energy is considerable. Our committee is
    more that Newton was right--the body set in motion tends to
    stop the next day, unless you continue to apply pressure.
        But I think the good news is as we work through this and
    actually give people the tools and the ideas of how to do this,
    there is now beginning to be genuine excitement in the career
    people.
        Senator Dorgan. Senator Tester, did you have other
    questions?
        Senator Tester. Yes, I just had one, if I might.
        Senator Dorgan. Let me just--if you might, let me finish
    with my one question, then I'll recognize you for whatever you
    wish.

                               DECARBONIZING COAL

        People are coming to my office with really interesting
    ideas. I had a person in some while ago who has a couple
    hundred scientists working on developing synthetic microbes to
    chew the coal. That's a scientific term, chew the coal, I
    guess. Actually, the synthetic microbes would consume the coal,
    and through the consumption of coal by these microbes, you
    would produce methane, and probably even be able to do that in
    situ, underground.
        I have no idea whether that's just harebrained or
    unbelievably interesting in the next 5 years, 25, or 50 years.
    Someone comes to me with a patent that says, ``I have the
    silver bullet with respect to decarbonizing coal.'' In fact, we
    had a hearing on it, and the guy that comes to the hearing is
    the recognized expert in the country from Stanford on cement
    and concrete. And he takes all of the flue gas from a coal
    plant, and through mineralization, or whatever, produces a
    product that is, he says, harder than concrete and more
    valuable and contains all of the CO2.
        A company comes to me and says, ``We have a process by
    which we separate CO2 with the flue gas, and we get
    nitrogen, hydrogen, and baking soda, and baking soda contains
    all the CO2.'' Those are just three, but there are
    lots of them, lots of people out there doing interesting
    things.
        Give me your assessment. And the reason I'm asking this is
    because I believe, again, we're going to continue to use coal
    in the future. The question is, how effectively and at what
    cost do we decarbonize coal?
        Give me your assessment of those kinds of things and ideas,
    and are you running into them, and do you believe they
    represent great promise for the future?
        Secretary Chu. I'm running into them. I think many of them
    are very interesting, and we are looking at them very hard. I
    think one of the things that you're seeing and the things I'm
    also seeing is there's an unleashing of incredible ingenuity
    and imagination. Not all these things will work. Most of them
    will probably not work, but yet out of that, I think there's a
    great possibility that there would be some really very good
    ideas.
        I'm a big fan of, at least in these early stages, where it
    costs very little to explore these ideas, to explore as many of
    them as possible. Now, this is actually one of the joys of
    being in the job I have. We can look at these wonderful new
    ideas and say, ``Is there going to be merit in this 5, 10, even
    15 years out,'' of all those things, the concrete, the
    conversion of coal, so most of the pollutants and the really
    bad stuff is just left deep underground, and you just sip out
    the natural gas.
        These are potentially very good ideas. What's especially
    nice about some of these ideas, especially the one on the bio
    part, is that's occurring in an area where the science is
    advancing very rapidly. And so the chance of a dramatic
    breakthrough--because we now know how to reprogram these
    microbes in completely new ways, offer real hope.
        Whenever you see the science advancing most rapidly,
    there's more likelihood of getting really big breakthroughs.
        Senator Dorgan. Senator Tester?

                          RENEWABLE PORTFOLIO STANDARD

        Senator Tester. Thank you, Mr. Chairman. I just--there are
    two policies that we're wrestling with right now. One of them
    is putting a value on carbon, and the other one is a renewable
    portfolio standard. Assuming we put a value on carbon, is there
    really a need for a renewable portfolio standard?
        Secretary Chu. I think there is. Because of the way you are
    going to be capping and bringing down the cap in a gradual way,
    that it--and the type of legislation that is being discussed
    actually has to allow the United States to make this transition
    over a period of time. I mean, that's realistic. We just have
    to do that.
        And what our renewable portfolio standard does is it gives
    you a guaranteed market, and so it can tell investors, we need
    to get to let's say 15 or 20 percent. The price signal, if you
    will, from the cap and trade and the decrease in the carbon
    emissions is one way, but that has to be, by its very nature,
    in order for the country to make a transition, a slow gradual
    process, and a renewable electricity or renewable clean energy
    standard, you say, now I've created a market, and so it's a
    draw, so that the investment community can say, ``Yes, I can
    put in my wind turbines or my photovoltaics.'' So they actually
    complemented each other.
        Senator Tester. Okay. Thank you very much.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Dorgan. Well, Mr. Secretary, you are the first
    Cabinet Secretary to use the term joy in describing your work
    in all the years I have served here, but I expect that joy
    reflects your background as someone who ran a science lab, and
    having access to all of the interesting things that are going
    on in these laboratories.
        At this time I would ask the subcommittee members to please
    submit any additional questions they have for the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                 Questions Submitted by Senator Byron L. Dorgan

        Question. The DOE currently has approximately 190 multi-year
    contracts for hydrogen related research that would be terminated under
    the fiscal year 2010 DOE budget request. How many of these contracts go
    through fiscal year 2010? What is the amount of funding that would be
    required in fiscal year 2010 to honor these existing contracts?
        Answer. The refocused Fuel Cell Technologies program allows the
    Department to prioritize technologies that will have a more immediate
    energy impact and bring consumers advanced transportation choices
    sooner. Certain projects in the areas of hydrogen production and
    delivery, hydrogen storage, technology validation, systems analysis,
    manufacturing, safety and codes and standards, education, and market
    transformation would not be funded at the 2010 request level. If the
    Department continued on the previous schedule, the 190 projects would
    require approximately $105 million in fiscal year 2010. However,
    project performers know that funding is subject to annual appropriation
    and changing priorities.
        Question. Congress set up the Hydrogen Technical Advisory Committee
    (HTAC) to provide detailed analysis of the hydrogen and fuel cell
    vehicle program to the Secretary. Did you consult with the HTAC before
    making the decision to terminate the hydrogen and fuel cell vehicle
    programs?
        Answer. The Secretary considered all available information before
    making the decision to re-focus research, development and demonstration
    activities on fuel cell system technologies. While the HTAC
    periodically submits reports, letters and other information to the
    Secretary for consideration, the HTAC primarily provides valuable
    technical progress information, which is only one of multiple entities
    supporting DOE funding allocation decisions.
        Question. The 2006 Hydrogen Posture Plan established key technical
    milestones and timelines. Would you agree that the hydrogen program has
    been meeting and exceeding these milestones? If this is the case, how
    would the fiscal year 2010 budget request not be short-circuiting the
    progress being made by this program?
        Answer. The Department agrees that the program has been meeting a
    number of the milestones. However, given the Nation's economic climate
    and the urgency in addressing climate change and petroleum reduction,
    the Department is balancing the advanced transportation technology
    portfolio to fast-track lower-risk energy technologies and to bring
    consumers near-term, advanced transportation choices. Technologies such
    as biofuels and plug-in electric drive vehicles will achieve benefits
    sooner, at less cost, and with less technology risk than hydrogen fuel
    cells.
        In addition, the Recovery Act provides approximately $41.9 million
    for near-term benefits such as commercialization and deployment of fuel
    cells and job creation in fuel cell manufacturing, installation,
    maintenance, and support services that will help develop a supply base
    that could eventually support automotive applications. The Department
    also plans to spend up to approximately $50 million in fiscal year 2010
    through the Office of Science for relevant cross-cutting basic research
    (e.g. catalysis, membranes and biological/photoelectrochemical
    approaches) to enable breakthroughs in hydrogen technologies and $16.4
    million through the Office of Fossil Energy to continue work on
    hydrogen production from coal, with carbon sequestration, due to the
    importance of zero carbon approaches.
                                     ______

                  Questions Submitted by Senator Patty Murray

        Question. Secretary Chu, I am pleased to see an overall increase
    for Energy Efficiency and Renewable Energy. We've got to move forward
    toward a clean energy economy and this will help keep us on that path.
        And now that you have spent some time at the Department, I'm
    looking forward to hearing an update on the Water Power Program. As you
    know, the Program received $40 million in fiscal year 2009 and the
    President is requesting a 25 percent reduction in funding, which I am
    very concerned about. We must continue investment in our existing hydro
    facilities to allow us to use those flexible resources to firm up
    intermittent renewable resources like wind and solar. And we must also
    increase our work to develop new marine and hydrokinetic technologies
    that may also be able to act as base load resources in the future.
        What are your priorities for the Water Power program, specifically
    with regard to both marine and hydrokinetic technologies and also with
    regard to conventional hydropower?
        Answer. DOE is excited about the potential to develop both emerging
    marine and hydrokinetic technologies as well as untapped hydropower
    resources, including efficiency or capacity upgrades at existing
    facilities, the construction of hydropower plants at existing non-
    powered dams, and the possible construction off small or ``low-impact''
    hydropower and pumped storage facilities.
        The $40 million appropriated for water power in fiscal year 2009
    allowed DOE to initiate aggressive action to address both marine and
    hydrokinetics and conventional hydropower, and the Department is
    working diligently to ensure this new increased level of funding is
    spent carefully and wisely. The Department's current priorities for
    marine and hydrokinetic technologies (i.e. wave, tidal, in-stream,
    ocean current, and ocean thermal) are to evaluate the cost and
    performance of the various technology types, to determine how much
    energy is available and extractable from each resource, to support the
    industry in designing and testing innovative energy conversion devices,
    and to predict and evaluate the possible environmental impacts of water
    power technologies. As the size of these resources and the ability of
    emerging technologies to capture those resources becomes clearer, the
    Department will be better able to determine if higher funding levels
    are necessary.
        DOE also recognizes that incremental conventional hydropower
    generation requires a careful second look, and is particularly
    enthusiastic about its potential to provide on-demand, dispatchable
    power to support grid stability and further integrate variable
    generation. The Department's priorities for hydropower are to address
    barriers to the development of incremental hydropower generation
    (including efficiency and capacity upgrades at existing facilities and
    the construction of facilities at existing non-powered dams) and to
    address the development of pumped storage. DOE is undertaking a
    comprehensive effort to understand existing hydropower assets and
    resources, to identify undeveloped incremental hydro resources and
    costs, to quantify and maximize the value of the existing hydro fleet
    to support the grid, and to improve the environmental performance of
    hydropower generation in the United States.
        Question. Mr. Secretary, I've already reiterated my invite for you
    to come out to Washington and see the DOE footprint in my State. And I
    also want to encourage you--again--to visit the Marine Sciences
    Laboratory in Sequim, Washington. Not only is it located on the
    beautiful Olympic Peninsula, it is also the Department's only marine
    sciences lab. I encourage you to use the Water Power Program to expand
    the work at the lab, and utilize the expertise and knowledge there.
        I am not reassured that this administration sees the value of this
    potential clean energy source. Can you tell me how you plan to
    integrate the Marine Sciences Laboratory into the Water Power Program?
        Answer. The Department is funding a number of activities in the
    Pacific Northwest, including PNNL's Marine Sciences Lab. Researchers at
    the Marine Sciences Laboratory work closely with the DOE-funded
    Northwest National Marine Renewable Energy Center, a partnership among
    DOE, the University of Washington, and Oregon State University. The Lab
    also supports environmental assessments at two tidal energy projects in
    the Puget Sound led by 2008 DOE grant recipients, Verdant Power and
    Snohomish County Public Utility District, so that it can thoroughly
    test and develop marine energy technology designs and launch
    demonstration projects. In addition, two DOE solicitations (FOAs No.
    DEFOA0000069 and 0000070) for water power projects closed on June 4,
    which included environmental studies for marine energy, and for which
    PNNL was eligible to apply.
        Question. Secretary Chu, hydropower is an important clean energy
    resource in the Pacific Northwest. Work is needed to assess potential
    resources and environmental impacts, technical upgrades, integration
    with renewable, and the potential of pumped storage. How do you plan to
    support these conventional hydropower needs within the Water Power
    program?
        Answer. The Department recognizes the strong role that conventional
    hydropower plays in our Nation's renewable energy portfolio and is
    enthusiastic about exploring further the untapped potential of
    incremental conventional hydropower. We are addressing its needs in our
    Water Power Program through four strategic objectives: understanding
    assets and resources, increasing incremental power generation,
    improving environmental performance, and maximizing hydropower values
    to the grid. A key first step is a project the Department is calling
    the National Hydropower Asset Assessment. This effort will build and
    analyze a unique and comprehensive database of existing Federal and
    non-Federal projects, their generation outputs, and water availability
    at the projects. This assessment will also provide a basis for
    evaluating current technology needs and opportunities that will help
    hydropower maintain its important position among renewable energy in
    the United States.
        The Department is also soliciting new, industry-led projects to
    assess undeveloped hydropower resources at existing dams in the United
    States. This opportunity is encompassed within the Advanced Water Power
    Funding Opportunity Announcement (DE-FOA-0000069), which will be
    announced this summer. DOE laboratories are also engaged in providing
    new engineering and environmental R&D to support the hydropower
    industry.
        Question. Mr. Secretary, what incentives can we put in place to
    facilitate the development of new pumped storage resources and the
    continued investment in our existing hydro facilities, to allow us to
    use those flexible resources to firm up intermittent renewable
    resources like wind and solar?
        Answer. Development of new pumped storage projects in the United
    States faces major challenges in two areas: financing very large
    capital construction costs, and surviving a long, costly, and uncertain
    regulatory process that is as complex as that associated with nuclear
    power. If new pumped storage projects used renewable energy in their
    pump cycle, these projects could also get consideration for inclusion
    in renewable energy standards, which would provide an additional
    financial incentive for development. Other policy initiatives that
    would help this type of development include streamlining the regulatory
    process and designing energy markets that return more reliable, long-
    term benefits to developers of generation units that provide valuable
    services to the Nation's electricity grid.
        DOE recently issued a Notice of Intent on the $3.3 billion Smart
    Grid Investment Grant Program and a draft Funding Opportunity
    Announcement (FOA) for an additional $615 million for Smart Grid
    Demonstrations funded by the Recovery Act. Energy storage technology
    and specifically smart grid applications, including integration of
    pumped hydro storage with renewable resources like wind and solar, are
    within the scope of these two Recovery Act projects. The Department is
    in the process of reviewing all comments received during the public
    commenting period for incorporation into the final FOAs, both of which
    are expected to be released in June 2009 through the FedConnect portal
    at www.fedconnect.net.
        Question. As DOE builds toward President Obama's clean energy
    economy, how will DOE evaluate a resource's contribution to and
    potential to meet these important, ambitious energy and environmental
    goals? What role does DOE anticipate for hydropower in helping to meet
    these objectives, especially as Congress moves to address global
    warming?
        Answer. DOE is actively investigating the potential role of water
    power technologies, including both emerging marine and hydrokinetic
    technologies as well as conventional hydropower, in meeting the
    President's clean energy goals.
        The Department is working to better understand the role for the
    full suite of marine and hydrokinetic technologies, including wave,
    tidal, ocean current, river in-stream, and ocean thermal energy, by
    evaluating the cost and performance of the various technology types,
    determining how much energy is available and extractable from each
    resource, supporting the industry in designing and testing innovative
    energy conversion devices, and predicting and evaluating the possible
    environmental impacts of water power technologies. As the size of these
    resources and the ability of emerging technologies to capture them
    becomes clearer, the Department will better be able to assess their
    true potential in contributing substantially to the national
    electricity generation portfolio.
        In addition, DOE is enthusiastic about the potential development of
    certain untapped hydropower resources, including efficiency or capacity
    upgrades at existing facilities, the construction of hydropower plants
    at existing non-powered dams, and possibly the construction off small
    or ``low-impact'' hydropower and pumped storage facilities. As a large-
    scale, and quickly dispatchable generation source, incremental
    hydropower may be able not only to provide a clean and renewable source
    of electricity but also facilitate the further integration of
    intermittent renewable resources.
        Question. As you know, transportation emissions are a significant
    source of greenhouse gas emissions. This administration is investing
    considerably in alternative fuels for energy security and environmental
    reasons; however, most of those are focused on personal vehicles. As
    you know, air transportation is solely dependent on jet fuels at this
    time. What thought has DOE given to advancing jet biofuels, including
    research and development, feedstock development, technology and
    infrastructure?
        Answer. Traditionally, DOE has focused on ground transportation
    fuels, while most air transportation work has been conducted by the
    Department of Defense, the Department of Transportation and the
    National Aeronautics and Space Administration. However, DOE has begun
    to focus on the production of heavy duty fuels including, ``green'' and
    renewable diesels, and aviation fuels.
        For example, the Joint BioEnergy Institute led by Lawrence Berkeley
    National Laboratory is re-engineering microbes to produce hydrocarbon
    fuels like green gasoline, diesel, and jet fuel. A subset of recently
    selected DOE Energy Frontiers Research Centers will focus on
    fundamental research related to producing advanced biofuels, such as
    bio-oils from microalgae, which are promising intermediates for the
    production of advanced biofuels, including green jet fuel. The National
    Renewable Energy Laboratory, Sandia National Laboratory, and other
    laboratories are also launching research into algal biofuels for the
    Defense Advanced Research Projects Agency and Air Force Office of
    Scientific Research. Algae-based fuels will also be eligible for both
    Advanced Research Projects Agency-Energy and DOE Loan Guarantee funding
    opportunities.
        Additionally, DOE will use Recovery Act funding to support a
    competitive solicitation for two research consortia aimed at
    accelerating the development of cost competitive advanced fungible
    biofuels, which include hydrocarbon fuels, diesel and jet fuel, and
    algae based biofuels which also include jet fuel. The solicitation is
    expected to be released in the summer of 2009. In order to capture
    relevant technologies that are ready for deployment, a current
    competitive solicitation closing on June 30, 2009 allows for pilot- and
    demonstration-scale biorefineries that include jet fuel from biomass.
    DOE's Office of Fossil Energy announced $70.6 million of Recovery Act
    funding will be spent to facilitate the existing algae-based carbon
    mitigation project at Cholla Power Plant in Holbrook, Arizona to expand
    testing with a coal-based gasification system. The goal is to produce
    fuels from domestic resources while reducing atmospheric CO2
    emissions. DOE's Office of Fossil Energy and the National Energy
    Technology Laboratory issued a Recovery Act funding opportunity on June
    8 that allows conversion of to CO2 biomass (algae, for
    example) and subsequent biofuels production as a mechanism of
    CO2 sequestration and use.
        Question. Secretary Chu, I want to ask about a section of the
    hydrogen fuel cell budget, the Market Transformation program. This
    subcommittee has in the past supported the Market Transformation, which
    helps support fuel cell deployment in early commercial applications,
    because we share your view that we ought to do now what we can do now
    on fuel cells. I understand that you allocated a small part of the
    stimulus dollars to fuel cell deployment this year. Can you tell me why
    the President's budget proposes no funding for Market Transportation
    program?
        Answer. The President's budget proposes no additional funds for
    market transformation activities in fiscal year 2010 because the $41.9
    million of Recovery Act funding dedicated to fuel cell market
    transformation activities will support 13 projects over fiscal year
    2009 and fiscal year 2010. These projects will deploy more than 1,000
    fuel cells and will help create jobs in fuel cell manufacturing,
    installation, maintenance and support service sectors. Together with
    $72.4 million of industry cost-share, the total 2-year funding for
    these projects is $114.3 million.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

            LOAN GUARANTEES--LOAN PROGRAM--3.5 YEARS AND NO REWARDS

        Question. Mr. Secretary, the Department has taken over 3.5 years to
    establish the loan guarantee program and it still has not granted a
    single loan guarantee. I believe this program has tremendous potential,
    but worry that it is not being implemented in a timely and effective
    manner. For example:
        GAO recently notified the subcommittee staff that the current
    subsidy model used to establish the risk premiums paid by applicants
    was suspended in February by OMB.
        Finally, I understand you have also proposed several changes to the
    operations of the loan guarantee program, but many of these reforms
    have yet to be implemented.
        How soon, will you be implementing your reforms and will any of
    these changes require legislation?
        Answer. The Department is continuously implementing changes in its
    procedures that facilitate the loan guarantee process. The Department
    of Energy has not identified any needed legislative changes.
        Question. When do you expect to make final awards in light of OMB
    suspending the use of the credit subsidy model?
        Answer. To clarify, OMB did not suspend the credit subsidy model.
    In implementing the model, the Department identified a technical issue
    related to certain types of projects and OMB and DOE have resolved the
    issue. The Department issued a conditional commitment for its first
    loan guarantee in March and issued two additional conditional
    commitments in July.
        Question. Is there anything Congress can do to help?
        Answer. The Department appreciates Congress's support for this
    important program.

                                INDUSTRY LETTER

        Question. I have attached a copy of the letter sent to the
    President regarding specific reforms to the Loan Guarantee program.
        Can you please review each of the specific recommendations and
    provide a written response to the subcommittee as to your position of
    each of the policy recommendations and possible impact to the program.
        Answer. The Department is currently reviewing the letter.
        not all science funding is equal--especially at the weapons labs
        Question. Mr. Secretary, I am troubled by the disparity in funding
    for applied and fundamental scientific research provided to DOE labs
    verses the NNSA labs. Clearly, the cancellation of the Los Alamos
    Neutron Science Center (LANSCE) Refurbishment is the most glaring
    example of the selectiveness of the research funding in this budget.
    The LANSCE facility is the scientific corner stone of Los Alamos,
    serving both classified and unclassified work and with over 500 users
    annually.
        How do you explain the failure in the budget to link the DOE and
    NNSA science?
        Answer. Budgeting is, in the end, an exercise in priorities and
    choices with limited resources. While there is certainly good science
    that could be done with a refurbished LANSCE, other investments in both
    NNSA and Science facilities will yield a greater and more immediate
    benefit. A refurbishment could be considered in the next budget cycle.
        Question. The OMB Web site lists LANSCE refurbishment as a
    terminated program and specifically states one reason being that
    Nuclear Energy Office doesn't support isotope production any longer.
    Last year the isotope program was shifted to the Office of Science
    program. Will LANSCE continue to have a roll [sic] in the Science
    program?
        Answer. The Isotope Production Facility (IPF) at LANSCE uses a
    portion of the H+ beam extracted at 100 MeV from the
    accelerator; this facility produces a variety of radioisotopes used in
    medical diagnosis and treatment and for scientific research. Together
    with DOE's Brookhaven and Oak Ridge National Laboratories, the IPF
    provides the national supply of radioisotopes not available
    commercially for both research and applications. In addition to regular
    fiscal year 2009 appropriations and an fiscal year 2010 request within
    the Office of Science, the IPF is currently receiving Recovery Act
    funds from the Office of Science for enhanced isotope production
    capabilities and R&D. The LANSCE accelerator also supplies protons to
    the Lujan Center, a pulsed spallation neutron source that is used by
    researchers supported by the Office of Science, NNSA, and other
    agencies.

               THE NEED FOR SCIENTIFIC LEADERSHIP WITHIN THE NNSA

        Question. Mr. Secretary, in light of your budget, which fails to
    adequately invest in building the science missions at the NNSA labs, I
    believe we need to establish a new position within the NNSA to steward
    and cultivate scientific research using the existing NNSA facilities. I
    believe this position should report to Secretary, Deputy Secretary and
    the NNSA Administrator. This might help raise awareness of both the
    weapons science, and non-weapons science that goes on at our NNSA labs.
    Certainly the grand challenge of energy security and climate change
    science are of such complexity that this work can and should be shared
    with all the labs.
        I am considering a modification to the NNSA Act to create a new
    position within the NNSA reporting directly to you to lead the NNSA
    science program and to work with the rest of the Department to
    integrate the national security capabilities with those in basic and
    applied programs within DOE. What do you think about that?
        Answer. I share your concern about sustaining science and
    engineering vitality at the NNSA's laboratories at Los Alamos,
    Livermore and Sandia. We are considering how to best broaden and
    sustain our science underpinning of nuclear security and how to do that
    appropriately for the related interests of other agencies that use
    these laboratory capabilities for science and national security
    missions. It is possible that a new position as you describe could be
    appropriate and useful in sustaining and advancing the science and
    engineering the Nation needs. At present we are focusing on basis and
    needs for our nuclear security science and engineering considering both
    the Department's missions and the related interests such as those in
    the intelligence community, the Department of Defense and the
    Department of Homeland Security. Within a few months, when I have a
    clearer picture of the basis and needs for these science and
    engineering skills, we will be in a better position to discuss the
    change you propose.

                            FOSSIL ENERGY--FUTUREGEN

        Question. The FutureGen project was halted due to cost escalations,
    but it is my understanding that the administration is considering
    resuming this project, using $1 billion in Recovery Act Funds to do so.
        Can you share with us your thoughts on resuming this project?
        Answer. DOE officials have been meeting with officials of the
    FutureGen Industrial Alliance, Inc., and on June 12, Secretary Chu
    announced that an agreement was established with the Alliance to move
    forward with the FutureGen project pending a joint decision based on a
    detailed cost estimate and fundraising activities, thereby limiting the
    risk of cost increases while accomplishing the goals of the program.
        Question. There is roughly $1.5 billion available for the Clean
    Coal Power Initiative (CCPI) round three solicitation. This far exceeds
    the initial requested amount for this solicitation, and in large part
    is due to project defaults from previous rounds. This research also
    mirrors the demonstration goals of building a zero-emission coal plant
    as proposed by FutureGen.
        Will you please explain to us why you are considering restarting
    the FutureGen project, when that same type of research is available for
    the CCPI round three solicitation?
        Answer. The FutureGen project has already completed conceptual
    design, project siting, approximately 1 year of preliminary design
    activities, an extensive Environmental Impact Statement (EIS), and an
    associated risk assessment. With those activities already completed, if
    the project was reinstated in the near future, the FutureGen Alliance
    conceptually could complete preliminary and detailed design and, if a
    decision were made to proceed, potentially could start the construction
    phase in 2010. Conversely, commercial demonstration projects resulting
    from the CCPI round three solicitation are at the proposal or project
    definition stage of development. Accordingly, it may take those
    projects considerable time to commence construction, compared to
    FutureGen. Given the time-sensitive nature of both climate change and
    economic recovery, the FutureGen project (if it is restarted) could
    provide a demonstration of technology that could accelerate follow-on
    activities such as CCPI projects (where relevant.) Also, CCPI
    demonstration projects may involve different technologies and site
    locations than FutureGen. We believe it is prudent to develop a
    portfolio of power plant and carbon capture technologies, as well as to
    compile operational experience on different regional sequestration
    geologies throughout the United States.
        The FutureGen Project will provide for the design, construction and
    operation of a coal-fueled, integrated gasification combined cycle
    (IGCC) with pre-combustion subsystems for the capture of carbon dioxide
    and geologic sequestration into a saline formation. In comparison,
    CCPI-3 will provide commercial demonstration projects that may include
    post-combustion capture systems or an oxy-fueled combustion process.
    CCPI-3 will provide one or more sequestration options, including
    beneficial reuse in enhanced oil recovery or enhanced coal bed methane
    recovery options as well as the possibility of basalt formations or
    stacked storage. The different approaches provided by these programs
    will support an expanded portfolio providing the DOE the ability to
    make progress toward capture and sequestration goals.

                                    SCIENCE

        Question. This budget includes over $300 million in new Secretarial
    priority initiatives, while funding for Nuclear Energy, Fossil Energy
    and NNSA Science have all been reduced.
        How do you reconcile this investment?
        Answer. Under the Secretary's proposed initiatives the Department's
    overall investment in Nuclear Energy, Fossil Energy, and NNSA will
    actually increase, with new funding going into areas with the biggest
    potential pay-off for the Nation. In Nuclear Energy, the Secretary is
    proposing two new Energy Innovation Hubs, one to support ``Extreme
    Materials'' with the goal of achieving higher reactor efficiencies and
    one to support advanced computer modeling and simulations of nuclear
    processes and systems. For Fossil Energy, a Hub is envisioned to
    advance Carbon Capture and Sequestration technology. And, within the
    NNSA, funding shifts from construction to the transition of the
    National Ignition Facility to a fully capable experimental facility in
    pursuit of the first ignition campaign.
        In addition, the RE-ENERGYSE program (Regaining our ENERGY Science
    and Engineering Edge) is a $115 million new initiative designed to
    attract and train the next generation workforce for the 21st century
    energy economy. RE-ENERGYSE will support education and R&D initiatives
    in all energy programs.

                                     ARPA-E

        Question. In light of the new Energy Hubs, large untapped potential
    in the loan guarantee program, and substantial funding increases for
    EERE and Science, I am trying to figure out the role ARPA-E at the
    Department of Energy, except as another layer of bureaucracy.
        Can you please provide a specific example or technology that will
    benefit from ARPA-E and how is it different from the loan guarantee
    program, office of science or renewable energy efforts?
        Answer. ARPA-E is a highly entrepreneurial program that will fund
    ``creative, out-of-the-box, transformational'' energy research not
    currently funded by other programs. ARPA-E seeks to accelerate
    transformational advances in areas which address national energy
    priorities and are too risky for industry to invest in without public
    support. Transformational R&D is about creating new ways of doing
    things and leading to the next generation of technology that will allow
    the United States to be competitive in the global market.
        ARPA-E will seek out the best ideas and move quickly to bring
    selected immature energy technologies with exceptional potential beyond
    the risk barriers that prevent their translation from the laboratory
    bench to the marketplace. Essential aspects of this nimble and flexible
    approach include:
      --Technology Focus Flexibility.--ARPA-E will look for the best
            opportunities to improve energy security and curb climate
            change by making significant programmatic investments lasting 2
            to 5 years. ARPA-E will fund transformational, high risk
            technologies with the potential for 2-3  improvements in
            technology performance and/or cost when compared to current
            technologies. ARPA-E will then move on to the next big ideas,
            shifting into and out of areas depending on the most promising
            opportunities for transformational change.
      --Programmatic Flexibility.--ARPA-E will have the flexibility to
            forge and nurture optimized partnerships that combine unique
            talents and insight from different fields. The programs can use
            DOE's ``Other Transactions'' authority (Technology Investment
            Agreements) to help attract organizations that traditionally do
            not participate in Government RD&D programs. Also, ARPAE will
            promote results-oriented programs through the use of
            challenging program milestones and the discipline to end
            programs that fail to perform.
      --Organizational Flexibility.--ARPA-E is a lean, flat organization
            that reports directly to the Secretary of Energy. ARPA-E has
            very broad hiring authority to attract program managers from
            universities, industry, the venture capital community and
            elsewhere. Program managers will be part of the organization
            for 3 year terms--not for their entire career. After having
            made a successful technology impact, they will move on to other
            opportunities in industry, academia, and elsewhere. ARPA-E's
            structure will promote technical and programmatic agility by
            ensuring that the organization has the right resources to
            address the goal of enhancing the United State's economic and
            energy security.
        These essential aspects of ARPA-E's approach will allow scientists
    and technologists to rapidly bring transformational ideas to a level of
    maturity sufficient for industry to take over development and bring the
    resultant technologies to market. ARPA-E's mission is to enhance the
    economic and energy security of the United States by developing new
    energy technologies that offer the potential for making significant
    progress toward reducing imported energy; reducing energy-related
    emissions, including greenhouse gases; and improving energy efficiency.
        Each of the other existing DOE organizations has a unique role that
    ARPA-E complements.
      --The Office of Science (SC) is charged with discovery and knowledge
            generation. SC is focused on the fundamentals of energy-related
            science, generating new discoveries and a base of knowledge
            which are used to create future energy technologies and improve
            existing ones.
      --The Office of Energy Efficiency and Renewable Energy (EERE) and the
            other Applied Programs at DOE are focused on applied R&D as
            well as demonstration and deployment activities in specific,
            targeted, program areas which address national energy
            priorities and in collaboration with industry. Both EERE and
            ARPA-E focus on high pay-off technology development. However,
            EERE supports a more focused suite of technologies through a
            longer gestation period. Such longer-term support may include
            commercial viability demonstration projects which are often
            necessary before market acceptance of capital-intensive energy
            technologies as well as activities which address other
            information, market, and regulatory barriers to technology
            adoption. The commercial demonstration projects involve large
            scale engineering and process integration work and require
            specialized management and oversight.
      --The Energy Innovation Hubs, modeled on the Department's successful
            Bioenergy Research Centers, will focus significant R&D
            resources within SC, EERE and other Applied Programs on a
            sustained development approach to basic and applied R&D on our
            most critical energy science and technology challenges. This is
            to be contrasted with the opportunistic style of ARPA-E, which
            is designed to push an area rapidly forward and then move on to
            another priority. Each Hub will be comprised of a highly
            collaborative team spanning many disciplines and drawn from the
            full spectrum of R&D practitioners--including universities,
            private industry, non-profits, and national laboratories--and
            each Hub is expected to become a world leader for R&D in its
            topical area. The Hubs will support cross-disciplinary R&D
            focused on the barriers to transforming energy technologies
            into commercially deployable materials, devices, and systems.
            Each Hub has proposed funding at $25 million per year, for a 5-
            year term, with additional start-up funding of $10 million in
            the first year for renovation (but not ``bricks and mortar''),
            equipment, and instrumentation.
      --The Loan Guarantee Program is for a later stage of technology
            development, guaranteeing loans to support early commercial use
            of advanced technologies (and for a limited time commercial
            technologies under the Recovery Act). The Loan Guarantee
            Program is targeted at early commercial use, not energy
            research, development, and demonstration programs.
        Each of the organizations has a unique contribution for creating,
    developing, and deploying the energy technologies this Nation needs.
    ARPA-E was formed this spring and has released its first solicitation,
    but has not yet selected nor funded any projects. ARPA-E is organized
    to manage high risk R&D projects proactively. Many years of experience
    in scientific research and technology development have shown that
    different stages of the science and technology enterprise need
    different management styles and organization. ARPA-E complements the
    existing DOE organizations by adding one specifically organized and
    focused on high-risk transformational technologies.

                                 NUCLEAR ENERGY

        Question. Will the United States continue to play a role in the
    Global Nuclear Energy Partnership international discussions and
    contribute actively to these meetings and support international
    research and best practices regarding nuclear safety, security and
    nonproliferation? Will the Department of Energy continue to send staff
    to participate in these meetings?
        Answer. Yes, the United States continues to support the objectives
    of the international component of GNEP and the use of civil nuclear
    energy in ways that advance safety, security and nonproliferation. The
    Department continues to participate in the GNEP international meetings
    while the subject of how best to achieve GNEP-international objectives
    is undergoing an interagency review. We believe that proliferation
    issues should be a top priority in any discussions about the expanded
    use of civil nuclear energy and, in particular, in discussions that
    relate to development, deployment and operation of fuel cycle
    technologies. Thus, it is important for the Department to remain
    engaged in international meetings and activities that are developing
    strategies to ensure reliable nuclear fuel services and to provide
    management options for spent fuel in a manner that minimizes
    proliferation concerns.

                                 YUCCA MOUNTAIN

        Question. Nuclear power will be critical to reaching our energy
    independence and reducing our reliance on fossil fuels. Yet, with the
    termination of Yucca Mountain in this budget, we still have no clear
    strategy on how to deal with nuclear waste.
        Exactly what is the Department's strategy to deal with spent fuel?
        Answer. The administration intends to convene a ``blue-ribbon''
    panel of experts to evaluate alternative approaches for meeting the
    Federal responsibility to manage and ultimately dispose of spent
    nuclear fuel and high-level radioactive waste from both commercial and
    defense activities.
        Question. Why should the ratepayers, who have paid $20 billion in
    fees, be forced to continue to store on site and not be entitled to a
    refund of these fees?
        Answer. We remain committed to meeting our obligations for managing
    and ultimately disposing of spent nuclear fuel and high-level
    radioactive waste. The administration intends to convene a ``blue-
    ribbon'' panel of experts to evaluate alternative approaches for
    meeting the Federal responsibility to manage and ultimately dispose of
    spent nuclear fuel and high-level radioactive waste from both
    commercial and defense activities. The administration looks forward to
    ongoing dialogue with members of Congress, interested stakeholders, and
    others as we review these alternative approaches in the months ahead.
        Question. You have announced that you intend to appoint a Blue
    Ribbon Commission to consider all the options for addressing our spent
    fuel needs.
        When do you intend to appoint this commission and what will they
    specifically be asked to consider?
        Answer. The ``blue-ribbon'' panel will provide the opportunity for
    a full public dialogue on how best to address this challenging issue
    and will provide recommendations that may form the basis for working
    with Congress to revise the statutory framework for managing and
    disposing of spent nuclear fuel and high-level radioactive waste. As we
    go forward with convening the panel, I will keep Congress informed of
    our progress.

            IDAHO NATIONAL LAB--NEXT GENERATION NUCLEAR PLANT (NGNP)

        Question. Mr. Secretary, the Idaho laboratory has aggressively
    pursued the Next Generation Nuclear Plant (NGNP) project. The Energy
    Policy Act of 2005 authorized the construction of this reactor at the
    Idaho National Lab.
        The fiscal year 2010 budget documents make no mention of this
    plant. In fact, rather than prioritizing research on two advanced
    technology reactors which were down selected last year, this budget
    proposes to expand research back to 6 types of advanced reactors.
        Can you please explain the justification for expanding the
    Department's research priorities? Where is this program headed and what
    does it mean for the NGNP reactor at Idaho?
        Answer. The fiscal year 2010 budget request of $191 million
    represents a firm commitment to move forward with needed long term
    research and development on underlying technologies supporting
    Generation IV reactor concepts, including high temperature gas reactors
    under consideration for the Next Generation Nuclear Plant (NGNP). The
    request also includes $35 million for a modeling and simulation Energy
    Innovation Hub. The Department is currently evaluating its long-term
    plans for the NGNP project, which would rely on the private sector
    entering into a cost-sharing partnership with the Department. This
    budget request reflects the Department's commitment to be a strong
    partner in support of gas reactor technology.

                                    PENSIONS

        Question. Understanding that the pension funding shortfalls
    continue to shift on a daily basis; will the Department please provide
    written quarterly updates regarding the estimated pension shortfalls
    and programmatic impacts?
        I think every member of this subcommittee would classify
    Environmental Cleanup as a priority, and you can see this in the
    funding provided in the Recovery Act. However, your request decreases
    the funding from fiscal year 2009 based on funding in the Recovery Act.
    EERE and Science also received large sums of money in the Recovery Act,
    but both of those programs are increased in your budget request.
        How can you justify cutting cleanup because of Recovery Act funds,
    when you have a $400 million pension shortfall in this program?
        Answer. The Department closely monitors the funding obligations
    associated with DOE contractor sponsored defined-benefit (DB) pension
    plans. Each contractor that sponsors a DB pension plan collects
    information to determine a plan's funded status as of the end of each
    pension plan year (that for most plans is December 31) that is then
    certified by a plan's actuary as of April 1. This funded status is the
    basis for determining what level of funding the contractor must
    contribute to a DB pension plan to ensure that as of the end of a plan
    year the plan is funded in accordance with applicable law (e.g., the
    Employee Retirement Income Security Act) and Departmental direction.
    Evaluations of a plan's funded status at interim points during the
    pension plan year would not change the level of funding required for
    that pension plan year or provide any certainty about what level of
    funding will be needed for the next pension plan year. Therefore,
    quarterly updates on the funded status of a plan would not provide
    information that would be useful in determining the amount of funds
    that will be needed to meet annual funding requirements. However, the
    Department is prepared to brief your staff on this issue at any time.
        The fiscal year 2010 budget request for the Environmental
    Management program supports the Department's mission and allows
    contractors to make all required pension payments to their DB pension
    plans.
        Question. Do you foresee any layoffs at any of the cleanup sites as
    a result of unfunded pension obligations?
        Answer. The Department closely monitors the funding obligations
    associated with DOE contractor sponsored defined-benefit (DB) pension
    plans. Each contractor that sponsors a DB pension plan collects
    information to determine a plan's funded status as of the end of each
    pension plan year (that for most plans is December 31) that is then
    certified by a plan's actuary as of April 1. This funded status is the
    basis for determining what level of funding the contractor must
    contribute to a DB pension plan to ensure that as of the end of a plan
    year the plan is funded in accordance with applicable law (e.g., the
    Employee Retirement Income Security Act) and Departmental direction.
    Evaluations of a plan's funded status at interim points during the
    pension plan year would not change the level of funding required for
    that pension plan year or provide any certainty about what level of
    funding will be needed for the next pension plan year. Therefore,
    quarterly updates on the funded status of a plan would not provide
    information that would be useful in determining the amount of funds
    that will be needed to meet annual funding requirements. However, the
    Department is prepared to brief your staff on this issue at any time.
        The Department does not anticipate impacts to the EM contractor
    workforce during fiscal year 2010 due to contractor funding of DB
    pension plans.

                             ENERGY INNOVATION HUBS

        Question. Mr. Secretary, this budget provides $280 million to
    establish eight energy hubs, a personal priority of yours. These eight
    centers of excellence will attack energy related problems in a
    collaborative manner.
        Why did the budget recommend establishing a hub for extreme
    materials research within the Office of Nuclear Energy and at the same
    time cancel the refurbishment of the Los Alamos Neutron Science Center,
    which supports a similar mission and also has computing capabilities?
        Answer. The Energy Innovation Hub for Extreme Materials will be
    competitively chosen. Its mission will be to support cross-disciplinary
    research and development focused on the barriers to transforming energy
    technologies into commercially deployable materials, devices and
    systems. Since the location and specific work scope of the Energy
    Innovation Hub for Extreme Materials will be decided through a
    competitive procurement process, it must be independent of the
    refurbishment of the Los Alamos Neutron Science Center.
        While there is certainly good science that could be done with a
    refurbished LANSCE, DOE believes that other investments in other
    facilities will yield a greater and more immediate benefit.
        The eight Energy Innovation Hubs will advance highly promising
    areas of energy science and technology from their early research
    concept stage to the point where the risk level is low enough for
    industry to deploy them into the marketplace. The work of the Hubs will
    encompass the full span from basic research to engineering development
    to commercialization and hand-off to industry.
        Question. Did the Department give any thought to establishing a hub
    to focus on environmental cleanup? What about a hub to defeat the cyber
    security threat?
        Answer. The Department deliberated at length on the optimum number
    and topics for the Energy Innovation Hubs. The goal for the Hubs is to
    make significant progress in overcoming current barriers to the United
    States' becoming a global leader in new energy technologies. The focus
    of the Hubs is on development and commercialization of clean, economic,
    sustainable energy technologies.
        Neither the Environmental Management program nor Cyber Security
    efforts in the Department fall within this ``energy technologies''
    focus of the Hubs. And, in fact, each of these efforts is already well
    defined and supported. That said, the concept of establishing a Hub for
    either Environmental Management or Cyber Security could be considered
    in the future if such an idea seemed advisable.

                                 WEATHERIZATION

        Question. The weatherization assistance program has over $5 billion
    available from the ARRA, Continuing Resolution, and fiscal year 2009. I
    am told that the Department will be spending that money over the next 3
    years.
        How can you justify another $220 million request when you cannot
    spend it this fiscal year?
        Answer. To achieve the increases in the numbers of homes
    weatherized, State and local agencies are in the process of hiring and
    training thousands of workers. In addition to increased hiring, State
    and local agencies will be making a substantial capital investment in
    procuring vehicles and equipment to outfit these new weatherization
    crews. However, the ``ramp-up'' in the number of weatherized homes per
    month enabled by Recovery Act funds will not be fully realized until
    the hiring, training, and acquisition process is completed. DOE expects
    that the weatherization network should be close to its target rate of
    22,000 homes weatherized per month by the end of the year. As a result,
    DOE expects that weatherization activities enabled by the Recovery Act
    should continue into 2011.
        Additional funds in fiscal year 2010 are required to maintain the
    pace of hiring, training and expansion enabled by the Recovery Act in
    order to build the capacity needed to realize the President's goal of
    weatherizing 1 million homes annually. Without this continued
    investment, new hires could be lost at the end of 3 years and local
    agencies could be saddled with excess vehicles, equipment, and costs
    associated with lay-offs of their work forces.

                                 CYBER SECURITY

        Question. Mr. Secretary, the largest increase in the budget of the
    Office of Electricity Delivery and Reliability is for cyber security.
    No doubt, this is in response to the press reports that foreign hackers
    can gain access to our electrical grid.
        However, NNSA cyber security staff has briefed the subcommittee
    regarding a large and sustained increase in cyber attacks against
    Department systems this year. Unfortunately, the budget for NNSA cyber
    security fails to provide any increase to combat these cyber attacks on
    our national security infrastructure.
        How do you rationalize an increase in the Office of Electricity,
    but no increase for the NNSA?
        Answer. NNSA's cyber security budget was not increased because NNSA
    has sufficient resources to address the threats.
        Question. Do you believe you have the threats to the NNSA
    classified and national security information contained?
        Answer. The threats to the national security information and
    classified system within the NNSA computing environment are constantly
    changing and represent risks to our operations. However, with the
    technology enhancement (i.e. EnCase Enterprise) and process
    improvements (NNSA Policy (NAP)) NNSA has invested in over the past 2
    years, I believe that we have minimized the threats to the classified
    environment and national security information and are operating at an
    acceptable level of risk. The Department and NNSA senior leadership
    will continue to monitor the threats to our classified information
    technology assets along with the accompanying risks in order to make
    necessary changes and provide an appropriate level of protection.

                                 URANIUM TAXES

        Question. Mr. Secretary, your budget proposes a $200 million/year
    tax on nuclear power utilities to be applied to the Uranium Enrichment
    Decommission and Decontamination Fund. This account currently enjoys a
    surplus of $4.7 billion and can sustain the ongoing cleanup for 7 years
    at current spending rates. Since these funds are not needed immediately
    and haven't been reauthorized by Congress I have to assume this is
    nothing more than a gimmick used to offset deficit spending or meet
    budget shortfalls.
        Mr. Secretary, the GAO did a study last year and found that the
    Department had a very valuable amount of unrecovered uranium sitting in
    storage at the very sites you want to cleanup. The value of these
    depleted uranium tails easily exceed the revenue raised by the tax and
    cleanup an existing liability on the Department's books.
        Will you consider the sale of the depleted uranium tails stored in
    Kentucky and Ohio as an alternative to raising taxes on utilities who
    use nuclear power and have already paid $1.5 billion in taxes already?
        Answer. The Department continues to monitor the uranium market as
    it manages various inventories of uranium declared excess to the
    Nation's national security needs. Any proceeds from any sale of the
    Department's uranium inventory will be deposited in the U.S. Treasury
    as required by the Miscellaneous Receipts Act (31 U.S.C.  3302);
    therefore, the proceeds cannot be applied toward cleanup of the gaseous
    diffusion plants.

                                CLEAN UP FUNDING

        Question. Mr. Secretary, your budget tells two distinctly different
    stories regarding the stimulus funds. When it comes to environmental
    cleanup, you justify a reduction in the fiscal year 2010 budget request
    due available stimulus funds. [sic] However, when it comes to renewable
    energy projects you have provided additional increases despite that
    program enjoying $17 billion in additional Stimulus funding.
        Can you please explain why this budget tells two completely
    different stories regarding the impact of stimulus funding on the
    budget?
        Answer. The total funding requests provided in the fiscal year 2010
    budget, in conjunction with Recovery Act funds, were carefully
    considered so as to make the biggest impact, given the status of the
    science and technology in each area.
        The fiscal year 2010 budget was formulated in light of the
    significant funding provided in the Recovery Act. Recovery funding
    enabled the Department to accelerate a number of important commitments
    in the areas of renewable energy, environmental management, grid
    modernization, carbon capture and sequestration (CCS) and basic science
    research.
        In building the fiscal year 2010 request, the administration
    adopted a thoughtful approach that considered not only whether a
    program had received Recovery Act funding, but also how those funds fit
    within our overall policy goals and priorities.
        In some cases, the Recovery Act investments are so significant that
    they amount to several years of base funding. This allowed the
    Department to make prudent use of our resources to address other high
    priorities. In other instances, like Environmental Management, the
    Recovery funding is being used on projects that meet the objectives of
    economic stimulus, but which may not ordinarily compete well against
    projects aimed at addressing the clean up of higher-risk sites. Our
    fiscal year 2010 request for EM continues to focus on high risk sites.
                                     ______

                  Questions Submitted by Senator Thad Cochran

        Question. Mr. Secretary, in your budget for the Strategic Petroleum
    Reserve, you propose roughly $50 million for the purchase of a new
    cavern to replace an existing storage cavern that was said to pose ``an
    extreme environmental risk.'' My staff was informed that the Department
    purchased this cavern instead of taking advantage of salt domes already
    owned by the Department of Energy for Strategic Petroleum Reserve
    Expansion. Why?
        Answer. The Department has not purchased any new caverns for the
    Strategic Petroleum Reserve. The cavern that has been identified for
    decommissioning, Cavern 20, is located at the Bayou Choctaw site and is
    in very close proximity to the edge of the salt dome. After use during
    Hurricane Katrina in 2005, Cavern 20 experienced preferential leaching
    towards the edge of the salt dome. Continued use of the cavern presents
    a risk of major environmental danger. The fiscal year 2010 request
    proposes funding for the purchase of an existing commercial storage
    cavern that is located adjacent to the Bayou Choctaw site to replace
    the unsound cavern. It is vital for the Department to maintain its
    current inventory level and drawdown response capabilities at the Bayou
    Choctaw site because this site is the only Strategic Petroleum Reserve
    site that directly serves the refiners on the lower Mississippi River
    and refiners in the Midwest served by the Capline Distribution System.
    Crude oil releases from this site were instrumental in keeping the
    Capline system refiners supplied after the hurricanes in 2005 and 2008.
        Question. Your acting assistant Secretary for the Strategic
    Petroleum Reserve testified before the Environment and Public Works
    Committee recently about legislation sponsored by Senator Bingaman to
    create new storage for refined oil in the Strategic Petroleum Reserve.
    As you know, salt domes in my State of Mississippi were identified by
    the last administration as a possible location for the expansion of the
    Strategic Petroleum Reserve. Although funds were not included for
    expansion activities in your budget, your staff expressed interest in
    the idea of new refined oil storage capacity. The Department of Energy
    owns salt caverns in Mississippi, which could hold both refined and
    crude oil. Will Mississippi be considered as the site for this plan,
    likely to be included in the Energy package Senator Bingaman is
    planning to move through the Senate this summer?
        Answer. Although the Department has identified land for site
    development for 1 billion barrel expansion of the SPR at Richton,
    Mississippi, the Department has not acquired the land. Rather, DOE has
    completed prerequisite activities to include salt dome seismic
    analyses, site environmental surveys, and title work in preparation for
    the site acquisition. DOE has recently concluded studies for
    preparation of a Supplemental Environmental Impact Statement (SEIS) to
    find more environmentally suitable locations for the water intake
    system, the offshore brine disposal and the marine terminal in
    Pascagoula.
        The Department is currently evaluating the situation involving the
    land acquisition and the additional $31.5 million appropriated in
    fiscal year 2009 for new site expansion activities, beyond land
    acquisition.
        Question. Funding for fiscal year 2009 for the Strategic Petroleum
    Reserve included $35 million for the Richton, Mississippi site,
    contingent on a report issued by the Department within 45 days. My
    staff has contacted yours about the report. What is the status of this
    report?
        Answer. Pursuant to the fiscal year 2009 Omnibus Appropriations Act
    (Public Law 111-8), a draft report assessing the effects of expansion
    of the Reserve on the domestic petroleum market is undergoing internal
    review. We will publish and submit the final report to Congress as soon
    as the review process has been completed.
                                     ______

               Questions Submitted by Senator George V. Voinovich

        Question. Over the last several years, the Department of Energy has
    greatly increased its oversight of the contractors responsible for
    managing and operating (M&O) the national laboratories under M&O
    contracts through prescriptive directives and requirements administered
    by overlapping and often redundant oversight organizations. Currently,
    the DOE's oversight organizations employ thousands of Federal staff
    with annual budgets of $500 million. Given that no other agency expends
    this amount of resources to oversee contractors who were supposedly
    engaged to apply best private-sector practices to operations, do you
    think the level of regulatory oversight at the Department's national
    laboratories has gotten out of control and hampers their ability to
    provide solutions to our Nation's pressing energy needs?
        Answer. As Secretary of Energy, I am firmly committed to improving
    efficiency at our Laboratories. There is much that the Department can
    and will do to enhance our laboratories' ability to deliver on the DOE
    missions. Significant improvement can be made with a concerted effort.
    Further, we will also review the use of independent certifications (ISO
    9000 and 14000, DOE Voluntary Protection Programs, etc.) as part of our
    expectations and our strategy for overseeing our contractors' business
    and operations systems and processes. Finally, we will consider the
    circumstances under which external regulation may be appropriate.
        Question. The Government-owned, contractor-operated (GOCO) model
    for laboratory management was originally designed to bring the best
    possible scientific and management talent to the laboratories and to
    allow them to apply the best private-sector business practices, thus
    maximizing their flexibility and efficiency. However, as laboratory
    resources are increasingly being redirected from performing R&D to
    demonstrating compliance with extremely prescriptive DOE work
    requirements, the argument for rethinking DOE's GOCO model is
    strengthened. What is your vision of the GOCO management relationship
    between DOE and its contractors?
        Answer. In my view, the proper relationship between the Department
    and its M&O contractors is one that focuses on clear definitions of
    performance expectations and outcomes and on holding our contractors
    accountable for achieving those outcomes.
        The success of the relationship between DOE and its M&O contractors
    depends on a clear and consistently-applied understanding of the roles
    and responsibilities of each party. The Department should specify what
    goals and requirements the contractors must meet and then hold the
    contractors accountable for meeting these goals. The contractors should
    determine how to meet those contract goals and requirements and apply
    best business practices.
        Question. How do you explain the current role of the local DOE
    site/field offices, and do you see this role changing over time?
        Answer. The current role of the local DOE site/field offices is to
    provide contractual support and oversight of the Department's national
    laboratories and other facilities that are Government-owned and
    contractor operated (GOCO). As you know, I am committed to improving
    the overall management of the Department, to make it more efficient,
    responsive, and economic in meeting our missions and better serving the
    American people. Toward this end I have already begun the process of
    reviewing the Department's current management structures, processes,
    and procedures, and would expect this to continue for some time.
        Question. In terms of execution of civilian R&D programs, how would
    you categorize the differences between the DOE Office of Science,
    National Science Foundation, and National Institute of Health?
        Answer. DOE is a mission agency with responsibilities in energy,
    environment, national security, and discovery science. The DOE Office
    of Science supports scientific research within this mission at over 300
    universities and the national laboratories. The Office of Science also
    plans, builds, and operates scientific user facilities for the
    scientific community. These facilities are a significant pillar of the
    U.S. scientific enterprise. The DOE Office of Science is the steward
    for 10 national laboratories, and it is the primary Federal supporter
    of basic research in service of the energy mission. The programs of the
    Office of Science are carefully planned and focused in areas of
    importance to advance the DOE mission.
        NIH is the primary Federal agency for conducting and supporting
    medical research. It is part of the Department of Health and Human
    Services, the principal agency for protecting the health of all
    Americans and providing essential human services. NIH employs
    intramural researchers and also funds extramural researchers. The DOE
    Office of Science generally does not directly fund medical science and
    does not have Federal intramural researchers.
        The National Science Foundation (NSF) aims ``to promote the
    progress of science; to advance the national health, prosperity, and
    welfare; to secure the national defense. . . .'' The NSF supports all
    fields of fundamental science and engineering, except for medical
    sciences, and also supports the social sciences.
        NSF is proposal-driven and funds science independent of the field
    or application of that science; in contrast the DOE Office of Science
    is mission-driven, supporting science serving the DOE missions of
    energy, environment, and national security.
        A cornerstone of Office of Science funding is a rigorous peer
    review process, much like NIH and NSF.
        Question. Although our national laboratory system includes what may
    be the largest and most impressive collection of scientific facilities
    and talent in the world, the American tax payer does not receive the
    maximum benefit from these investments because current DOE policy
    prevents labs from partnering with private companies on research
    proposals from Federal agencies. Would you support a change in current
    DOE policy to authorize national laboratories, on a non-exclusive
    basis, to partner with private industry on research request for
    proposals (RFPs)?
        Answer. Senator Voinovich, you raise an interesting issue as to how
    to best utilize our national laboratories, which for the most part are
    Government-owned contractor-operated and are Federally Funded Research
    and Development Centers (FFRDCs). Our national laboratories partner
    extensively with private industry through, for example, the Work for
    Others program, Cooperative Research and Development Agreements,
    licensing arrangements and user agreements. With respect to responding
    to RFPs, however, the Federal Acquisition Regulation, which applies on
    a Government-wide basis, requires that agencies sponsoring FFRDCs
    include in the sponsoring agreement a prohibition against the FFRDC's
    competing with any non-FFRDC concern in response to a Federal agency
    RFP. DOE's implementation of that requirement is set out in DOE Order
    481.1C stating that FFRDCs may not respond to RFPs that involve head-
    to-head competition. This preclusion is based partly on the sanctioned
    special access to Government information that FFRDCs have that could
    put commercial competitors at a disadvantage. The Order goes on to
    permit, under certain circumstances, FFRDCs to respond to Broad Agency
    Announcements, financial assistance solicitations, Program Research and
    Development Announcements, and similar solicitations which do not
    result in head-to-head competition. I believe that the DOE should look
    carefully at improving opportunities for private industry to partner
    with DOE national laboratories.
        Question. Has the Department of Energy determined which energy
    sources will provide the most electricity with the lowest carbon-
    emissions and smallest lifecycle footprint on the environment as a
    whole, including raw materials and land usage? Has the DOE done a
    comprehensive study to determine the effectiveness of U.S. energy
    subsidies, and if not, has the DOE determined which energy subsidies,
    if any, would result in the best return on investment for tax payers
    while meeting the President's GHG emissions targets?
        Answer. No, but the Department of Energy is continuing to develop
    and evaluate a portfolio of technologies with the lowest life-cycle
    costs and carbon footprint to meet the Nation's growing electricity
    demand.
        Numerous Federal programs operate today to help accelerate the
    deployment of greenhouse gas intensity-reducing technologies by
    providing various financial incentives, including direct subsidies.
    While these financial incentives are expected to reduce GHG emissions,
    they also incur costs to the U.S. Government. DOE is evaluating the
    economic and environmental effectiveness of energy subsidies. The
    Energy Information Administration did recently complete a study,
    ``Federal Financial Interventions and Subsidies in Energy Markets,''
    but this study does not calculate the return on investment in terms of
    GHG emissions reduction. The executive summary is available at: http://
    www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf.
        Question. What is the Department of Energy doing to help expand the
    number of nuclear power plants we have in the United States and reduce
    our dependence on foreign energy sources? Will additional loan
    guarantee authority be given to allow industry to move forward?
        Answer. The Nuclear Power 2010 (NP2010) program was established to
    address the issues limiting deployment of new nuclear plants in the
    United States. The primary goal of the NP2010 program was to
    demonstrate the streamlined Federal regulatory processes governing the
    siting and construction of new, standardized nuclear plant designs. The
    NP2010 program has successfully met its objectives, and we await
    industry decisions to build the first new nuclear plants in more than
    30 years. The NP2010 program is requesting $20.0 million in fiscal year
    2010 to complete support of the NuStart New Nuclear Plant Licensing
    Demonstration project. This industry cost-shared project includes
    interactions with the Nuclear Regulatory Commission (NRC) to obtain the
    NuStart Construction and Operating License for the AP1000 advanced
    light water reactor design including meetings with the Advisory
    Committee on Reactor Safety, issuance of Final Safety Evaluation
    Reports and Final Environmental Impact Statements and initiation of
    hearings by the Advisory Committee on Reactor Safeguards.
        Taken together, the NP2010 program and loan guarantees for nuclear
    power projects are designed to address the technical, regulatory and
    financial risks associated with deploying new nuclear plants. DOE is
    not seeking additional loan guarantee authority or additional
    appropriations for credit subsidy costs in fiscal year 2010.
        Question. What initiatives and programs is the Department of Energy
    planning to ensure we have the technical workforce required to
    maintain, build and service our Nation's nuclear power plants in a safe
    and efficient manner?
        Answer. The Office of Nuclear Energy will provide $2.9 million in
    undergraduate scholarships and graduate fellowships to high-quality
    undergraduate and graduate students going into nuclear science and
    engineering disciplines at universities and colleges located in the
    United States. The Office of Nuclear Energy also has recommended that
    29 universities and colleges receive a total of $6 million in grants
    for new equipment and instrumentation for their existing research
    reactors, for other specialized nuclear science and engineering
    facilities, and to establish classrooms and laboratories. These grants
    are designed to enhance the universities' and colleges' nuclear energy
    research and development capabilities to educate the next generation of
    nuclear engineers and scientists.
        Working with industry, the Office of Nuclear Energy will soon begin
    activities to more thoroughly analyze total workforce needs to support
    continued safe and reliable operation of the existing nuclear fleet and
    construction and operation of the next generation of nuclear power
    plants in the United States. Finally, the Department will continue to
    look for partnership opportunities with industry groups, academia, and
    other Government agencies to ensure an adequate, highly skilled
    workforce is available to ensure continued safe and reliable nuclear
    power operations.

                              SUBCOMMITTEE RECESS

        Senator Dorgan. Thank you for being with us this morning.
    Our subcommittee will want to work closely with you and with
    your staff in the Department of Energy as we work through the
    markup of an appropriations bill going forward in the coming
    fiscal year. This hearing is recessed.
        [Whereupon, at 11:54 a.m., Tuesday, May 19, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2010

                                  ----------

                             TUESDAY, JUNE 2, 2009

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:18 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Byron L. Dorgan (chairman)
    presiding.
        Present: Senator Dorgan, Feinstein, and Bennett.

                              DEPARTMENT OF ENERGY

                    National Nuclear Security Administration

    STATEMENT OF HON. THOMAS P. D'AGOSTINO, UNDER SECRETARY
                FOR NUCLEAR SECURITY AND ADMINISTRATOR
    ACCOMPANIED BY:
            BRIGADIER GENERAL GARRETT HARENCAK, PRINCIPAL ASSISTANT DEPUTY
                ADMINISTRATOR FOR MILITARY APPLICATION, OFFICE OF DEFENSE
                PROGRAMS
            KEN BAKER, PRINCIPAL ASSISTANT DEPUTY ADMINISTRATOR FOR DEFENSE
                NUCLEAR NONPROLIFERATION

                  OPENING STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. We will call the hearing to order. This is
    the Senate Appropriations Committee Subcommittee on Energy and
    Water Development.
        We appreciate all of you being here. I apologize for being
    just a bit tardy this morning.
        We are here to take testimony from Administrator Thomas
    D'Agostino of the Department of Energy's National Nuclear
    Security Administration on the fiscal year 2010 budget request.
        Joining Mr. D'Agostino at the witness table to help field
    questions will be the two NNSA Principal Assistant Deputy
    Administrators, Brigadier General Harencak--I hope I have that
    correct, Brigadier General. Welcome to you. And Mr. Ken Baker,
    Mr. Baker, welcome.
        This year's budget request of $9.9 billion for the NNSA is
    up $815 million, or almost 9 percent, when compared to the
    fiscal year 2009 appropriation. But almost $600 million of that
    increase is simply a transfer of the MOX fabrication facility
    construction project to NNSA. Excluding that shift, NNSA's
    budget is flat in fiscal year 2010, with only a tangible
    increase in the Naval Reactors Program.
        As we have seen in other parts of the Department of
    Energy's budget request, there are very few positive changes in
    the NNSA budget from fiscal year 2009 to fiscal year 2010. In
    fact, there are numerous program areas where the exact same
    number is requested in fiscal year 2010 as was requested the
    previous fiscal year. Whether it is a weapons program budget or
    the fossil energy program budget, it is hard to imagine that so
    little is truly in need of change over the coming year, and I
    assume we will talk about that this morning.
        I understand that the Nuclear Posture Review is currently
    underway and that this will have an impact on our stockpile and
    perhaps on the complex that supports the stockpile. However, I
    am not sure this is justification enough for decisions to halt
    some of the projects or for the lack of actual positive changes
    in the budget request. The fact is NNSA is going to have a very
    active future. That is clear when looking at the wide number of
    areas that we will discuss today.
        Through renegotiation of the START Treaty and completion of
    the NPR, we are likely to be on a path to fewer nuclear weapons
    in our stockpile. This will require more dismantlement. That
    requires more funding. However, we will continue to have
    nuclear weapons for the near future, and that, too, requires
    funding for stewardship and life extension programs.
        Also, the President announced in April his goal of securing
    vulnerable nuclear material around the world within 4 years.
    That is a very critical issue that we must address
    aggressively, and that, too, will cost some funding.
        Further, whether because of new treaties or actions by
    North Korea and others, proliferation and nuclear detection are
    becoming much more prominent as issues and are also critical
    issues and, once again, require funding. All of these areas
    require resources. A flat fiscal year 2010 budget means
    additional pressures, it seems to me, in the out-years, and
    that is something we will discuss this morning.
        I want to make one final point. The weapons program is
    primarily focused on issues directly related to the stockpile.
    But the fact is, a significant infrastructure funded by the
    weapons programs also benefits other programs, such as science
    and non-proliferation, both of which are important. The NNSA's
    computing program has led this Nation to the forefront of
    computing worldwide.
        I know that the announcement about that, that we have
    computing capabilities now that are not exceeded anywhere in
    the world, was made with great pride and that was done at our
    weapons lab. The program not only serves stockpile modeling,
    but also climate change, non-proliferation modeling, and more.
        NNSA computer modeling has contributed significantly to the
    Intergovernmental Panel on Climate Change. Their non-
    proliferation program uses computer modeling to better analyze
    seismic events related to detonation. This fact, I think, seems
    forgotten in the budget request.
        The NNSA's investment in supercomputing has dropped 7
    percent since 2006. By comparison, the Department of Energy's
    Office of Science computing budget has increased 79 percent
    over the same period.
        So we are in a political transition year. The stockpile
    still requires attention. Proliferation is an ever-increasing
    concern, and base capabilities still need to be maintained or
    increased. A flat budget is going to make that a very
    significant struggle.
        I understand, Mr. D'Agostino that you are not ultimately
    responsible for this budget request, but you have, nonetheless,
    come here to answer questions about it. We have seen the Office
    of Management and Budget passbacks that make it clear that OMB
    has significant control in this area. Although this may not
    reflect all of your views on all accounts, we will rely on you
    to explain it today.
        I have always appreciated your candor and appreciated
    working with you, Mr. D'Agostino. I am going to call on Senator
    Bennett for an opening comment. I do want to mention that we
    apparently will have either one or two votes, starting at 11
    o'clock today, and we will recess for that purpose.
        Senator Bennett.

                 OPENING STATEMENT OF SENATOR ROBERT F. BENNETT

        Senator Bennett. Thank you very much, Mr. Chairman.
        And most of the items that I intended to cover in my
    opening statement you have already covered. The budget is flat,
    and it is flat in a number of areas that, as you have outlined,
    need to be looked at and improved. It is reduced--this budget
    has reduced science funding and non-proliferation R&D by
    several hundred million dollars. And future funding will
    continue to erode the capability over time. I find that a very
    disturbing trend.
        I have always been willing to fund R&D, particularly the
    kind of pure science that we see in the national labs, and your
    description of the computing power and other things is an
    accurate portrayal of the challenge that we face.
        I support sustaining the test ban moratorium. But if we are
    going to do that, we have to have a significant investment in
    our scientific capabilities and the people and the
    infrastructure that go along to ensure those capabilities so
    that we can accurately predict the status of our nuclear
    deterrent. And I don't believe the budget provides adequate
    funding for the scientific capabilities and falls short in the
    areas you have described.
        So I look forward to working with you, Mr. Chairman, to try
    to repair this damage that has come. And Mr. D'Agostino, I have
    been sitting at the same table where you are in previous
    administrations, and I know the frustrations of making a
    submission to OMB and being told no less how much you are going
    to defend when you get to Congress. And we don't ask you to
    violate your instructions from OMB, but any degree of candor
    you can share with us would be very much appreciated.
        Senator Dorgan. Senator Bennett, thank you.
        We will try to get the sound system fixed here, get it
    turned up just a bit so the audience can hear.
        Senator Feinstein, would you like to make a brief opening
    comment, and then we will go to Mr. D'Agostino?

                     STATEMENT OF SENATOR DIANNE FEINSTEIN

        Senator Feinstein. Well, just one quick thing. I had the
    great pleasure--I guess it was Friday----
        Mr. D'Agostino. Yes, ma'am.
        Senator Feinstein [continuing]. Friday, of being at
    Lawrence Livermore to see the beginning--and Mr. D'Agostino was
    one of the speakers. And to see the beginning of the National
    Ignition Facility, which you have been helpful with, both of
    you, over the years. It has been somewhat controversial, but
    the conversation was so exciting, and that is that it may be
    possible--``may'' is the operative word--to combine fission and
    fusion to really be able to present a brand-new source of
    energy, which not only would be cost effective, but would be
    carbon free.
        And it would appear, and I hope--the reason I wanted to
    come was to ask you more about this--that this might well be
    the new mission of that lab. And I will just end it. I have
    watched the labs and really come to wonder if the right thing
    was done in the privatization of these labs because we have
    lost a lot of valued employees. And the labs are only good if
    they have a mission, and the mission has changed. So I want to
    talk about that a little bit later on.
        But thank you very much.
        Senator Dorgan. Senator Feinstein, thank you very much.
        Mr. D'Agostino, I just alluded to the announcement about
    the Roadrunner, I believe, at Los Alamos, the most powerful
    computer in the world. We have great accomplishment at our
    weapons labs, not dealing just exclusively with weapons. One of
    my concerns is given the changing of the nature of the Bell
    Labs over the years and so on, our national laboratories are
    critically important to this country continuing its edge in
    science and research and technology.
        I am very worried about losing the strength of our
    scientists at these laboratories. We need to continue funding,
    and there are many things that can be done in the weapons labs
    and the science labs that can advance this country's interests.
    I worry very much about diminished funding and losing some of
    our best and most capable people.

                     STATEMENT OF HON. THOMAS P. D'AGOSTINO

        So let me call on you for an opening statement, and then we
    will begin with questions.
        Mr. D'Agostino. Well, thanks very much, Chairman Dorgan,
    and Senator Bennett, Senator Feinstein.
        As you know, I am Tom D'Agostino. I am the Administrator
    here at the National Nuclear Security Administration. I am
    accompanied by Ken Baker, who runs our non-proliferation
    program, and Brigadier General Gary Harencak, who runs our
    defense programs activities and is responsible for maintaining
    the base capability on nuclear security for our program. And we
    do appreciate the opportunity to be here today and to talk to
    you about our programs and to answer your questions.
        Also, in the audience, we have some members of our summer
    student intern program. These are the folks, ultimately, I
    wanted them to come and see the process at work, the way
    Government works. These are the folks that will be leading
    these types of security programs out in the future. We are
    really proud, fortunate to have them here, and it is exciting
    to have young folks in the organization to see what we do and
    to capture, get a little bit of that vision that we saw at the
    National Ignition Facility, get excited about the programs, and
    take us forward. So I'm excited about that.
        As you know, we believe NNSA is critical to the security of
    the United States and our allies. The President's fiscal year
    2010 budget request is $9.9 billion. It is an increase, as you
    said, sir, of about 8.9 percent over the fiscal year 2009
    appropriated level. The budget request provides funding to
    enable the NNSA to leverage science, to promote U.S. national
    security objectives.
        NNSA programs are on the front of the lines of the
    following national security endeavors: maintaining a safe,
    secure, and reliable stockpile and capabilities to support that
    stockpile; accelerating and expanding our efforts here and
    around the world to reduce the global threat posed by nuclear
    terrorism, nuclear proliferation, and unsecured materials;
    providing the United States Navy with safe, militarily
    effective propulsion systems; and supporting U.S. leadership in
    science and technology.
        As the President has initiated bold steps to put an end to
    cold war thinking to lead to a new international effort to
    enhance global security, the 2010 budget request for NNSA is
    the first step. There are other steps, but this is the first
    step towards implementation of this new strategy.
        For our non-proliferation programs, funding increases are
    requested to expand and respond quickly to opportunities to
    reduce global nuclear threats. Increases are also requested, as
    you said, sir, in the Naval Reactors Program to begin
    development of reactor and propulsion systems for the next-
    generation submarine, among other activities.
        For the programs in our weapons activities appropriation,
    the budget strategy is to maintain capabilities and activities
    at the current level until the strategic direction is
    established in the upcoming Nuclear Posture Review.
        In President Obama's speech in Prague, he indicated his
    commitment to maintaining a safe, secure, and reliable
    stockpile while pursuing a vision of a world free from the
    threat of nuclear weapons. The NNSA maintains the unique
    knowledge and technical capabilities that are critical to
    achieving both of these objectives.
        Our non-proliferation programs are focused on securing the
    key ingredient of nuclear weapons, in effect, the weapons
    usable materials and the related equipment and technologies.
    Supporting NNSA efforts include the Elimination of Weapons-
    Grade Plutonium Production Program, which has been working with
    Russia to shut down Russia's plutonium production reactors, and
    the Fissile Material Disposition Program, which will provide a
    disposition path of 34 metric tons each of U.S. and Russian
    excess plutonium.
        The NNSA is a recognized leader on these and other non-
    proliferation initiatives to prevent proliferators or
    terrorists from acquiring a nuclear weapon. This includes our
    activities to secure and reduce weapons-grade nuclear materials
    at sites worldwide, but also our efforts to detect and
    intercept WMD-related materials in transit.
        In addition, we will also work in 2010 to support the
    President's call to strengthen the Non-Proliferation Treaty,
    support the International Atomic Energy Agency, and strengthen
    international safeguards inspections. To implement this
    comprehensive strategy, we will need to expand our cooperation
    with Russia, pursue new partnerships, and work to secure
    vulnerable nuclear material around the world in 4 years.
        Our Global Threat Reduction Initiative and the
    International Material Protection and Cooperation Programs will
    have a major role in this 4-year plan.
        NNSA is actively participating in a national debate over
    our Nation's nuclear security and non-proliferation strategic
    framework. This debate is not just about the size of the
    stockpile and warheads. It includes the inescapable obligation
    to transform our current cold war era nuclear weapons complex
    into a 21st century nuclear security enterprise that retains
    the capabilities necessary to meet emerging national security
    threats.
        In a future with fewer warheads, no nuclear tests, tighter
    controls on materials worldwide, and effective counteraction of
    nuclear terrorist threats, the science and technology
    capabilities will play an increased role, not decreased role,
    in addressing these challenges. We must ensure that our
    evolving strategic posture and our stockpile, non-proliferation
    programs, arms control, and counterterrorism programs are
    melded together in an integrated, comprehensive strategy to
    protect our country and our allies.
        The Department of Defense, as you know, has initiated this
    Nuclear Posture Review, which is scheduled to culminate in a
    report later this year. I want to assure the subcommittee that
    we are active members of that review and we are making sure
    that science and technology that underpins essential policy
    decisions is part of that review.
        As you know, we have made tremendous progress in reducing
    the size of our stockpile in recent years. The stockpile will
    now be less than one quarter of what it was at the end of the
    cold war, the smallest stockpile in 50 years. These reductions
    send the right message to the rest of the world that the United
    States is committed to Article 6 of the Non-Proliferation
    Treaty, which will help create a positive momentum heading into
    the 2010 NPT review conference.
        Each year since the Stockpile Stewardship Program was
    developed, we have been able to certify the safety, security,
    and reliability of the stockpile with no need to conduct
    underground tests. Since 1993, we have acquired a suite of
    capabilities determined necessary to maintain an effective
    stockpile.
        Most recently, as Senator Feinstein has mentioned, the
    National Ignition Facility has come online, and ultimately, we
    are going to be--our goal in the next few years is to actually
    apply these tools to address not only the national security
    problems but maintain the science that we need and to look for
    other opportunities to address our energy issues out into the
    future.
        But the challenge for stockpile stewardship in the future
    ultimately is to really make full use of this suite of tools.
    Following completion of the Nuclear Posture Review, we will
    prepare a 5-year plan, which recapitalizes our infrastructure,
    retains our scientific, technical, and engineering expertise,
    and makes full use of our experiments and supercomputing
    facilities.
        As the subcommittee knows, numerous external reviews have
    identified the fragile state of our technical expertise and
    capabilities, and it ultimately resides in our people. It is
    clear that our people are our most important resource. We need
    to retain those skills and capabilities and develop the next
    generation of scientists, engineers, and technicians needed to
    perform work in non-proliferation, in counterterrorism, and in
    forensics.
        Of course, we need to maintain--these are the same people
    that are responsible for maintaining our stockpile.
        Mr. Chairman and members of the subcommittee, that
    concludes my statement, and I will be pleased and look forward
    to taking your questions.
        [The statement follows:]

                Prepared Statement of Hon. Thomas P. D'Agostino

        Thank you for the opportunity to discuss our vision for the
    National Nuclear Security Administration. My remarks today focus on the
    fiscal year 2010 President's budget request. The budget requested today
    will allow the National Nuclear Security Administration to continue to
    achieve the mission expected of it by the President, the Congress, and
    the American people.
        In a recent trip to Prague, President Obama outlined his vision of
    a world without nuclear weapons. To this end, the United States will
    take concrete steps towards achieving such a world by reducing the role
    of nuclear weapons in our national security strategy and urging others
    to do the same. Until that ultimate goal is achieved, however, the
    United States will maintain nuclear forces sufficient to deter any
    adversary, and guarantee that defense to our allies. To support this
    vision, the National Nuclear Security Administration (NNSA) will
    continue to:
      --Ensure a safe, secure, reliable and effective nuclear weapons
            stockpile, even if that stockpile is reduced under a START
            Follow-On Treaty.
      --Reduce the threat to the United States posed by the proliferation
            of nuclear weapons, and related nuclear materials and
            expertise.
      --Provide safe, reliable, militarily-effective propulsion systems to
            the U.S. Navy.
        By pursuing its mission to achieve these ends, and by providing our
    unique knowledge and support to our partners in national security, the
    NNSA will continue to meet its current statutory responsibilities while
    supporting the long-term goal of a world free from the threat of
    nuclear weapons.
        While the President's long-term objectives are clear, the role of
    the nuclear weapons stockpile and America's deterrence policy are being
    reviewed as part of the ongoing Nuclear Posture Review. Efforts are
    underway in the NPR to establish the size and composition of the future
    stockpile and the means for managing geopolitical or technical risk--
    NNSA is fully engaged in these activities. Its role is to provide the
    technical and scientific input to inform policy decisions, and then to
    enable the implementation of the decisions.
        NNSA is advancing our knowledge of the physical; chemical, and
    materials processes that govern nuclear weapons operation and is
    applying that knowledge in extending the life of existing weapons
    systems. We have recently completed construction of the National
    Ignition Facility at the Lawrence Livermore National Laboratory (LLNL)
    to explore weapons-critical regimes of high temperature and pressure
    and will begin our first ignition campaign to improve our scientific
    understanding of phenomena that could previously only be explored
    theoretically or in full-scale nuclear testing. The NNSA is also
    conducting warhead Life Extension Programs to ensure that our country
    remains secure without the production of new fissile materials, and
    without conducting underground nuclear tests. On the basis of the most
    recent assessment by the Directors of our national nuclear weapon
    laboratories, today's nuclear stockpile remains safe, reliable, and
    secure. At the same time, we are concerned about increasing challenges
    in maintaining, for the long term, the safety and reliability of the
    aging, finely-tuned warheads that were produced in the 1970's and
    1980's and are well past their original planned service life.
        I am committed to continuing to transform our national laboratories
    and production plants into a smaller and more cost-effective Nuclear
    Security Enterprise. However, I am mindful that our design laboratories
    and production facilities are national assets that support a large
    number of defense, security, and intelligence activities. As the role
    of nuclear weapons in our Nation's defense evolves and the threats to
    national security continue to grow, the focus of this enterprise must
    also change and place its tremendous intellectual capacity and unique
    facilities in the service of addressing other challenges related to
    national defense. We are taking steps to move in this direction,
    including functioning as a national science, technology, and systems
    engineering resource to other agencies with national security
    responsibilities.
        The NNSA fiscal year 2010 congressional budget request will allow
    continued progress in obtaining the essential goals I have outlined. It
    will allow us to:
      --Continue transforming into a Nuclear Security Enterprise by:
        --Involving the next generation of our Nation's scientific,
                engineering, and technical professionals in the broad sweep
                of technical challenges;
        --Operating the National Ignition Facility, allowing the use of
                innovative technology to provide answers to important
                scientific questions;
        --Shrinking the cold war complex by preparing buildings for
                decommissioning and decontamination, and replacing these
                antiquated facilities with modern and efficient facilities;
                as well as disposing of excess real property through
                demolition, transfer and the preparation of process-
                contaminated facilities for transfer to the Department of
                Energy (DOE) Office of Environmental Management (EM) for
                final disposition;
        --Initiating a Site Stewardship program to ensure that NNSA
                increases the use of renewable and efficient energy, and
                reduces the number of locations with security Category I/II
                Special Nuclear Materials, including the removal of these
                materials from the Lawrence Livermore National Laboratory
                by the end of 2012; and
        --Reducing security, safety and environmental risks by
                consolidating and disposing of excess nuclear materials
                wherever possible.
      --Support the development and implementation of arms control,
            nonproliferation, and civil nuclear energy agreements by:
        --Providing technical and policy support to U.S. delegations
                negotiating arms control, nonproliferation, and peaceful
                nuclear energy cooperation agreements;
        --Developing the technologies and approaches needed to verify
                compliance with negotiated treaties and agreements; and
        --Providing training and technical support to the International
                Atomic Energy Agency.
      --Support U.S. commitments through construction of the Mixed Oxide
            Fuel Fabrication Facility and Waste Solidification Building to
            provide a disposition pathway for excess U.S. fissile
            materials, and to help Russia implement its reciprocal
            commitments.
      --Continue our successful programs to secure and/or eliminate
            vulnerable nuclear and radioactive material in other countries,
            enhance nuclear/radiological material detection capabilities at
            borders, airports, and seaports, and strengthen
            nonproliferation practices and standards worldwide.
      --Embark on the design and development of an advanced reactor core
            and propulsion plant supporting the timely replacement of the
            OHIO Class Submarine.
      --Overhaul of the land-based prototype reactor plant used to test
            advanced materials and techniques in a realistic operating
            environment prior to their inclusion in propulsion plants.
      --Honor the commitments made to those who won the cold war by
            ensuring their pensions are secure in times of financial
            uncertainty.
        Today, I'd like to testify on our efforts in Weapons Activities,

    Defense Nuclear Nonproliferation, and Naval Reactors.

                          WEAPONS ACTIVITIES OVERVIEW

        The NNSA will ensure that our nuclear stockpile remains safe,
    secure and effective to deter any adversary, and provide a defense
    umbrella to our allies. At the same time, NNSA will continue to pursue
    a modern more flexible Nuclear Security Enterprise that is
    significantly smaller than the Cold War complex, but is able to address
    a variety of stockpile scenarios.
        As I have committed to you previously, NNSA continues to retire and
    dismantle nuclear weapons. By 2012 our stockpile will be one-quarter of
    the size it was at the end of the cold war. As the United States
    prepares for the 2010 Review Conference of the Nuclear Non-
    Proliferation Treaty, this fact alone should emphasize the commitment
    we make to both our Nation and to the world.
        As a full partner in the Nuclear Posture Review, the NNSA is
    working with the Departments of Defense and State to establish the
    plans, policies, and programs that will govern the future posture of
    our nuclear forces and supporting infrastructure. The recently issued
    report of the Bipartisan Congressional Commission on the Strategic
    Posture of the United States will help guide these efforts. These
    reviews will assist the U.S. Congress and the administration in clearly
    defining our future direction.
        As the NPR proceeds, NNSA continues to carry out a number of
    activities in support of the stockpile including warhead surveillance,
    assessment, replacement of limited life components in existing weapon
    systems, and dismantlements. We are also continuing the W76 Life
    Extension Program and a feasibility study with the Air Force for a Life
    Extension Program for some models of the B61 gravity bomb. There are
    also activities planned in the six campaigns and the studies needed for
    Annual Assessment of the stockpile.
        The NNSA will also continue transforming the Nuclear Security
    Enterprise into a modern, smaller, and more flexible complex. The NNSA
    inherited a system of laboratories and production plants designed to
    produce large volumes of weapons and designs needed to counter Soviet
    aggression. We have initiated a major effort to right-size the
    enterprise to meet the new, anticipated requirements. The NNSA is
    consolidating Category I and II Special Nuclear Materials; removing
    these items from selected sites and providing safe, secure storage for
    this material.
        In fiscal year 2010, we will be reducing our infrastructure
    footprint through the deactivation and decommissioning of buildings
    such as Buildings 9206 and 9201 at Y-12. We will also plan for the
    future infrastructure through continuing design of the Uranium
    Processing Facility at Y-12, the Pit Disassembly and Conversion
    Facility at the Savannah River Site, and the Chemistry and Metallurgy
    Research Replacement Facility at the Los Alamos National Laboratory,
    and begin the process of planning for an orderly migration of missions
    to a smaller and more flexible facility at the Kansas City Plant.
        The NNSA has received assistance in our ability to alter our
    infrastructure in the form of an increase in the General Plant Projects
    limit. We are pleased with the decision to increase the ceiling on
    General Plant Projects from $5 million to $10 million. We believe that
    this aids in the maintenance and repair of the enduring enterprise.
    Following on this increase, the NNSA is submitting a legislative
    proposal to similarly increase the design cost limit for these
    construction projects from $600,000 to $1,500,000. We seek your support
    for the proposal.
        But while NNSA is reducing its footprint, and while the total
    number of warheads in the stockpile continues to decline, there are
    capabilities that must be preserved. Not only are these capabilities
    needed to support the maintenance of any stockpile, but they are also
    needed to support the Nuclear Security Enterprise's initiatives in
    nonproliferation, nuclear counterterrorism, nuclear forensics, and
    nuclear incident response. It's important to note that the enterprise
    does not scale linearly with the size of the stockpile; and the need
    for baseline functional capabilities is not eliminated with cessation
    of research into new designs and the cessation of any production of new
    weapons systems. These capabilities are needed whether we have a few
    warheads, or a few thousand.
        Although NNSA did not receive any funds directly from the American
    Recovery and Reinvestment Act, we are assisting other parts of the
    Department in implementing their plans for stimulus work at the NNSA
    sites and stand ready to do more.
        As NNSA prepares for the future, we must focus on the retention of
    our scientific, technical, and engineering personnel throughout the
    complex. Without experienced scientific, technical, and engineering
    personnel, NNSA cannot succeed at its mission. Throughout the cold war
    we were able to attract the Nation's brightest scientists, engineers,
    and technical professionals by providing challenges, facilities, and
    opportunities that were unique, were on the forefront of science, and
    that allowed them to put their talents to work to serve their country.
    Today we are transitioning our emphasis to a broader nuclear security
    mission, but our need to attract the best scientists, engineers and
    technical professionals remains. By developing new scientific tools
    such as the National Ignition Facility, new challenges such as the
    detection of smuggled uranium and plutonium, and the modernization of
    facilities such as the Chemistry and Metallurgy Research Replacement
    Facility, we can continue to attract bright technical minds who wish to
    serve their country. We believe that our response to the spectrum of
    threats to national security is not only the right steps for us to take
    to make the Nation more secure, but also will provide a significant set
    of technical areas that will motivate young scientists to join us in
    our mission.
        The challenges are huge and meeting them calls upon both basic
    science and applied technology. Approximately 70 years ago, Hans Bethe
    advanced the state of science with his critical work explaining the
    physical processes governing the life cycles of stars. Today the
    National Ignition Facility (NIF) stands on the threshold of producing
    stellar conditions in the laboratory. By moving the enterprise forward
    in advancing the boundaries of science, we will continue to attract our
    Nation's brightest minds to our scientific endeavors. In fiscal year
    2009, two significant technological milestones were achieved; crossing
    the one mega joule threshold with NIF and the one petaflop threshold in
    the Advanced Simulation and Computing Campaign.

                   DEFENSE NUCLEAR NONPROLIFERATION OVERVIEW

        As part of the President's comprehensive strategy to address the
    international nuclear threat, the President also called for
    strengthening the Nuclear Nonproliferation Treaty, accelerating our
    efforts to secure vulnerable nuclear materials around the world, and
    increasing our work to detect, deter, and eliminate illicit trafficking
    of nuclear materials. The NNSA Nuclear Security Enterprise is actively
    engaged in these and other nonproliferation missions and will provide
    the technical expertise to ensure they are successful.
        The movement of funding for the Mixed Oxide Fuel Fabrication
    Facility and the Waste Solidification Building into the Fissile
    Materials Disposition budget is the largest change in the fiscal year
    2010 Congressional Budget for Defense Nuclear Nonproliferation program.
    These critical facilities provide the nonproliferation programs a
    disposition pathway for at least 34 metric tons of surplus U.S. weapons
    grade plutonium. I'm pleased to report that the United States and
    Russia have agreed on a revised Russian program to dispose of Russia's
    34 metric tons of their surplus weapons plutonium. These changes will
    be codified in a Protocol that will amend the 2000 U.S.-Russian
    Plutonium Management and Disposition Agreement, and we expect to sign
    the Protocol this summer. In light of President Obama's recent
    statements in Prague and London, I am particularly pleased that the
    U.S. and Russian plutonium disposition programs are coming together at
    this time. As a result of these efforts, the United States and Russia
    will ultimately dispose of enough weapons plutonium for at least 17,000
    nuclear weapons.
        I should note also that with this budget request, we are submitting
    our last request for funding to eliminate the production of weapons-
    grade plutonium production in Russia by December 2010, through the
    shutdown of Russia's last weapons-grade plutonium production reactor in
    Zheleznogorsk.
        The NNSA directly supports President Obama's goal to accelerate
    efforts to secure all vulnerable nuclear material from around the world
    within 4 years, including the expansion and acceleration of our
    existing efforts. The NNSA is the key agency supporting the
    administration's goal of minimizing the use of highly-enriched uranium
    (HEU) in the civil nuclear sector through our program to shutdown
    entirely or convert HEU fueled research reactors to the use of low-
    enriched uranium (LEU) fuel. In fiscal year 2010, we will direct
    significant funding to the Global Threat Reduction Initiative (GTRI)
    mission to eliminate and protect vulnerable nuclear and radiological
    materials located at civilian sites worldwide.
        In fiscal year 2010, we will also improve the physical security of
    nuclear material, as well as facilitate the development and
    implementation of material control and accountability procedures, and
    train personnel, to protect a total of 73 nuclear sites throughout
    Russia and the former Soviet republics. The NNSA will fulfill the
    administration's goal of securing nuclear weapons-usable material by
    ensuring that the material possessed by the Russian Navy, the Russian
    Ministry of Defense, Rosatom and Russian civilian sites is secured.
        But improving the security of weapons-usable material at its source
    is only the start. We must also develop a Second Line of Defense in
    order to anticipate the possibility that nuclear weapons-usable
    material could be smuggled out and transported across international
    borders. And in fact, we know that illicit trafficking in nuclear and
    other radioactive materials continues, especially in Eastern Europe,
    the Caucasus, and Central Asia. In response to the President's charge
    to do more to combat nuclear trafficking, we will install additional
    radiation detection equipment at 42 foreign sites across Europe, Asia,
    and North America, and provide detection equipment in 15 additional
    ports where cargo is loaded for shipment to the United States.
        This work started several years ago. Technology advances and
    foreign personnel turnover have occurred since NNSA first began
    securing sites and borders in foreign countries. Funds will be used not
    only to perform new installations and train personnel at new sites, but
    will also be used to upgrade older equipment at existing sites, and to
    provide refresher training to foreign security professionals.
        Additionally, in fiscal year 2010, NNSA will expand and accelerate
    its Next Generation Safeguards Initiative (NGSI), adding $15 million to
    revitalize the U.S. technical and human capital base necessary to
    strengthen the international safeguards system and the International
    Atomic Energy Agency, in line with President Obama's charge in Prague.
    The NGSI complements related NNSA priorities to reduce proliferation
    risks associated with growing international interest in the use of
    nuclear power; to expand export control training and outreach; to
    develop and implement reliable fuel services as an alternative to the
    further spread of enrichment and reprocessing capabilities; and--
    consistent with the President's call for progress towards a world
    without nuclear weapons--to provide technical support for negotiations
    of the START follow-on agreement, Comprehensive Nuclear Test-Ban
    Treaty, and a verifiable Fissile Material Cutoff Treaty.

                            NAVAL REACTORS OVERVIEW

        The NNSA also contributes to national security through the Naval
    Reactors Program. This program ensures that the nuclear propulsion
    plants aboard our Navy's warships remain safe and reliable for their
    complete service lives. Over 40 percent of the Navy's major combatants
    are nuclear-powered. All of the Nation's aircraft carriers, attack
    submarines, guided missile submarines, and ballistic missile submarines
    enjoy the significant operational advantage afforded by nuclear power,
    including speed, endurance, and enhanced combat payload. Through NNSAs
    efforts, nuclear-powered warships are on station where American
    interests are threatened, and ready to conduct sustained combat
    operations.
        For over 60 years, the Naval Reactors program has had complete
    responsibility for all aspects of Naval Nuclear Propulsion. The Naval
    Nuclear Propulsion Program currently supports 82 active nuclear-powered
    warships and 103 operating reactors. This represents 8 propulsion plant
    designs, in seven classes of ships, as well as a training platform.
        Naval Reactors funding supports safe and reliable operation of the
    Nation's Nuclear Fleet. This includes providing rigorous oversight,
    analysis of plant performance and conditions, as well as addressing
    emergent operational issues and technology obsolescence for 71
    submarines, 11 aircraft carriers and four research and development and
    training platforms. This funding also supports new plant design
    projects (i.e., reactor plant for the GERALD R. FORD-class aircraft
    carrier and alternative lower-cost core for VIRGINIA-class submarines),
    as well as ensuring proper storage of naval spent nuclear fuel, prudent
    recapitalization of aging facilities, and remediation of environmental
    liabilities.
        The OHIO-class SSBNs, which are the most survivable leg of the U.S.
    Strategic Forces, are approaching the end of their service lives. The
    Navy recently completed studies for a follow-on replacement to the
    OHIO-class and is funding the commencement of design work in fiscal
    year 2010. NNSA funding in fiscal year 2010 supports reactor core and
    propulsion plant design and development efforts to support this
    replacement.
        Since 1978, the land-based prototype reactor plant (S8G) has
    provided an essential capability to test required changes or
    improvements to components and systems prior to installation in
    operational ships. The prototype has also provided required, high-
    quality training for new sailors preparing to operate the Nation's
    nuclear-powered vessels. This land-based prototype will run out of fuel
    and require a refueling overhaul starting in 2018. This overhaul and
    the resultant opportunity to test advanced materials and manufacturing
    techniques in a caustic operating environment will significantly
    mitigate risk in the OHIO Replacement reactor plant design. To support
    the refueling overhaul schedule, concept studies and systems design and
    development efforts will begin in 2010.
        The Expended Core Facility, located at the Naval Reactors Facility
    on the Idaho National Laboratory, is the central location for Naval
    spent nuclear fuel receipt, inspection, dissection, packaging for dry
    storage, and temporary storage, as well as detailed examination of
    spent cores and irradiation specimens. Continuous, efficient operation
    of this facility is vital to ensure the United States can support fuel
    handling operations in our shipyards conducting construction, repair,
    and restoration of nuclear ships. The existing facility and related
    infrastructure is over 50 years old and requires recapitalization. The
    mission need for recapitalizing this capability has been approved and
    conceptual design efforts begin in 2010.
        The Program continues to explore and develop potentially advanced
    technologies that could deliver a compellingly better energy source for
    nuclear ships. For example, using a supercritical carbon dioxide energy
    conversion as a replacement for the traditional steam cycle is
    envisioned to be significantly smaller for the same power output,
    simpler, more automated, and more affordable. Leveraging existing
    university, industry, and Nuclear Security Enterprise scientific and
    engineering work in this technology, conceptual development and small-
    scale testing is underway to support eventual megawatt-scale testing
    and prototyping.
        Acquisition of a new surface combatant (i.e., cruiser) in support
    of new ballistic missile defense and anti-air warfare mission
    requirements are currently under evaluation by the Navy. Based on these
    mission requirements, this new ship will potentially require higher
    energy capacity and output than is currently available from traditional
    fossil fueled power plants. Further, the National Defense Authorization
    Act (NDAA) for 2008 authorizes the Navy to construct all future major
    combatant vessels with integrated nuclear power systems unless this
    requirement is waived by the Secretary of Defense. The Navy is
    currently analyzing alternative shipboard systems that will determine
    final power plant requirements. Should the Navy decide to pursue a
    nuclear-powered cruiser in its current long-range shipbuilding plan,
    DOE-cognizant reactor core and propulsion plant design and development
    will be required.
        The value of nuclear power for naval propulsion is well recognized
    and the demand for its inherent capabilities remains strong. By taking
    every opportunity for economies in our work and business practices, we
    have made a concerted effort to meet the Navy's demand for new
    propulsion plant designs while assuring the safe and reliable operation
    and maintenance of the existing fleet. However, the need to deal with a
    formidable collection of new challenges coupled with the Program's
    aging infrastructure and environmental legacies requires a fortified
    level of resource commitment.
    NNSA Future-Years Nuclear Security Program
        The NNSA fiscal year 2010 congressional budget request is $9.9
    billion, a total of $815.4 million above the fiscal year 2009
    appropriations. Of the 8.9 percent increase, about 7 percent is
    attributable to the re-location of funding for the Mixed Oxide Fuel
    Fabrication facility project back to NNSA in the Defense nuclear
    Nonproliferation appropriation.
        The NNSA budget justification contains information for 5 years as
    required by section 3253 of Public Law 106-065, entitled Future-Years
    Nuclear Security Program (FYNSP). The fiscal year 2010-2014 FYNSP
    projects $50.4 billion for NNSA programs through 2014. The principal
    increases from the fiscal year 2009-2013 FYNSP are: the transfer of
    funding for the Mixed Oxide (MOX) Fuel Fabrication Facility project
    back from the Office of Nuclear Energy to NNSA; the multi-year
    initiative to further enhance global nuclear nonproliferation efforts;
    and some of the increase required to support the development of the new
    generation submarine reactor replacement. For Weapons Activities, the
    outyear projections reflect only a continuation of current
    capabilities, pending upcoming strategic nuclear policy decisions. The
    fiscal year 2011-2015 budget process is expected to present a fully
    integrated Future Years Nuclear Security Program budget aligned with
    the new strategic direction and program requirements for all of the
    NNSA programs.
    NNSA Budget Summary by Appropriation and Program
                Weapons Activities Appropriation
        The Weapons Activities appropriation funds five NNSA program
    organizations. (There are six subheadings below. Combining ``Site
    Stewardship'' and ``Infrastructure and Environment'' would reduce the
    count to five and mirror the NNSA structure.) The fiscal year 2010
    congressional budget request is $6.4 billion for Weapons Activities,
    essentially level with fiscal year 2009 appropriation.
                Defense Programs
        The fiscal year 2010 congressional budget request for Defense
    Programs is $5.0 billion, a decrease of 1.1 percent from the fiscal
    year 2009 appropriation that is primarily attributable to transitioning
    the Pit Disassembly and Conversion Facility and the Waste
    Solidification Building to other programs. The outyear projections for
    Defense Programs reflect a continuation of current programs and
    services pending further national nuclear policy direction expected
    during 2009.
        Within the President's Budget request level, the NNSA will continue
    all programs to meet the immediate needs of the stockpile, stockpile
    surveillance, annual assessment, and Life Extension Programs (LEP). As
    directed by the Nuclear Weapons Council, a feasibility and cost study
    was initiated in September, 2008, to investigate the replacement of
    aging non-nuclear components in the family of B61 bombs, and to study
    the potential incorporation of modern safety and security features in
    these systems. Included in the program are efforts to complete the B61
    Phase 6.2/6.2A refurbishment study evaluating end-of-life components,
    aging, reliability, and surety improvement options. The decrease within
    the Directed Stockpile Work (DSW) request is attributable mainly to the
    relocation of the funding for the Pit Disassembly and Conversion
    Facility (PDCF) to Readiness in Technical Base and Facilities (RTBF)
    and the Waste Solidification Building (WSB) to Defense Nuclear
    Nonproliferation.
        The Campaign activities for Science, Engineering, Inertial
    Confinement Fusion and Advanced Simulation and Computing maintain the
    fiscal year 2009 funding level throughout the FYNSP. The Science
    Campaign consolidates a new subprogram called ``Academic Alliances''
    that encompasses the funding for university grants, alliances, and the
    joint program with Science. The Engineering campaign increases emphasis
    on Enhanced Surveillance and Systems Engineering Technology in the
    fiscal year 2010 congressional budget request. The Inertial Confinement
    Fusion Ignition and High Yield Campaign is requested at $437 million,
    and in fiscal year 2010, the emphasis shifts away from NIF assembly and
    toward Facility Operations as the program continues to refine
    requirements and prepare for the first ignition experiments in 2010.
    The fiscal year 2010 congressional budget request for the Advanced
    Simulation and Computing Campaign provides growth in physics and
    engineering models as support shifts away from hardware procurements
    and system software.
        The Readiness Campaign funds the development and deployment of
    modern manufacturing capabilities to produce materials and components
    in compliance with weapon design and performance requirements and in
    accordance with Life Extension Program and refurbishment schedules. In
    fiscal year 2010, the Readiness Campaign will focus on supporting the
    Tritium Readiness activities and high priority projects to deliver new
    or enhanced processes, technologies, and capabilities to meet the
    current needs of the stockpile. The reduction in Tritium Readiness was
    planned, and is due to the cyclical nature of production.
        The Readiness in Technical Base and Facilities request is $62
    million above the fiscal year 2009 appropriations. The increase is
    attributable to additional funding provided to mitigate increased
    pension costs at the M&O contractor sites. Within the request for
    operating expenses, an increase is included for the Kansas City Plant
    supporting the work for the move to a new, smaller facility. Funding
    for construction projects is requested at $203 million to sustain
    ongoing construction and design efforts. The location of funding for
    the PDCF project has been changed from DSW to RTBF. One new
    construction project is requested: the Nuclear Facilities Risk
    Reduction Project at Y-12 will provide maintenance to sustain uranium
    related capabilities at Building 9212.
        The Secure Transportation Asset program is requested at $234.9
    million, an increase of 9.6 percent over the fiscal year 2009
    appropriation. The STA program plans to acquire a total of three
    transport category aircraft. One 737-type aircraft will be purchased
    each year--starting in fiscal year 2010, fiscal year 2011, and fiscal
    year 2012 to replace the aging aircraft. In addition to the aircraft
    purchases, the remaining increase will be used for training and
    equipment.
                Nuclear Counterterrorism Incident Response (NCTIR)/
                        Emergency Operations
        The NCTIR program responds to and mitigates nuclear and
    radiological incidents worldwide as the U.S. Government's primary
    capability for radiological and nuclear emergency response. The fiscal
    year 2010 congressional budget request for these activities is $221.9
    million, an increase of 3 percent over fiscal year 2009 appropriations.
    The increase reflects funding growth in three specific areas of the
    program--International Emergency Management and Cooperation, Emergency
    Response, and Render Safe Stabilization Operations. These initiatives
    support increased efforts to address serious emergency management
    programs in priority countries, while continuing and completing ongoing
    programs with the International Atomic Energy Agency (IAEA) and other
    international partners and countries; scientific breakthroughs for
    Render Safe Stabilization Operations and the Technical Integration
    programs and continued implementation of National Technical Nuclear
    Forensics for pre- and post-detonation phases and the Stabilization
    aspect of nuclear emergencies through development of first generation
    stabilization equipment including training and maintenance programs to
    selected teams nationwide in support of better emergency response
    capability.
                Infrastructure and Environment
        This organization is responsible for the Facilities and
    Infrastructure Recapitalization Program, (FIRP) and the new Site
    Stewardship Program which encompasses Environmental Projects and
    Operations (EPO) that provides for Long-Term Stewardship (LTS) at NNSA
    sites after remediation is completed by the DOE Office of Environmental
    Management, Nuclear Materials Integration, Stewardship Planning which
    contains a renewable energy efficiency project; and may ultimately
    include deactivation and demolition activities.
        The fiscal year 2010 congressional budget request for FIRP is
    $154.9 million, an increase of 5 percent above fiscal year 2009. This
    provides funding for recapitalization, infrastructure planning and
    construction. The increase supports continued progress in restoring the
    condition of mission critical facilities and infrastructure across the
    Nuclear Security Enterprise to an acceptable condition. The program's
    original goals established in fiscal year 2003 include: elimination of
    $1.2 billion of deferred maintenance, achieving a Facility Condition
    Index (FCI) of 5 percent, and elimination of 3 million gsf of excess
    facilities. The original $1.2 billion deferred maintenance buydown goal
    is based on the requirement to meet the FIRP commitment of 5 percent
    FCI for all facilities. The program's deferred maintenance goal was
    adjusted in fiscal year 2007 to eliminate $900 million of deferred
    maintenance by fiscal year 2013 as a result of transformation decisions
    that reduced facility deferred maintenance requirements. The principle
    assumption governing FIRP is that the program will be funded only
    through fiscal year 2013.
        The fiscal year 2010 congressional budget request for Facilities
    and Infrastructure Recapitalization is $154.9 million, an increase of 5
    percent above fiscal year 2009. This provides funding for
    recapitalization, infrastructure planning and construction. The
    increase supports continued progress in restoring the condition of
    mission essential facilities and infrastructure across the Nuclear
    Security Enterprise to an acceptable condition.
        The fiscal year 2010 congressional budget request for the new GPRA
    Unit, Site Stewardship, is $90.4 million. The goal of the Site
    Stewardship Program is to ensure environmental compliance and energy
    and operational efficiency throughout the Nuclear Security Enterprise,
    while modernizing, streamlining, consolidating, and sustaining the
    stewardship and vitality of the sites as they transition within NNSA's
    plans for transformation. The Site Stewardship program will institute
    and maintain a robust operational framework at the NNSA Government-
    owned, contractor-operated sites that encompass responsibility for
    achieving the NNSA mission. This new GPRA Unit will encompass
    activities currently under Environmental Projects and Operations (EPO)
    and will include new subprogram elements Nuclear Materials Integration
    (NMI) and Stewardship Planning. In the I&E organization only EPO was
    funded (as a separate GPRA unit) in fiscal year 2008 and fiscal year
    2009 and is reflected as such for those 2 years since this is a non-
    comparable budget submission. The Environmental Programs and Operations
    increases 7 percent over the fiscal year 2009 appropriation to address
    ongoing and new regulatory-driven Long Term Stewardship activities at
    NNSA sites where Environmental Management activities have been
    completed. Nuclear Materials Integration provides focused attention on
    the consolidation and disposition of specific NNSA special nuclear
    materials. Current activities include the de-inventory of security
    Category I and II Special Nuclear Material (SNM) from LLNL and also the
    consolidation and disposal of inactive actinides at other sites. Funds
    for these material consolidation and disposal activities are being
    transferred from Defense Programs to Infrastructure and Environment in
    fiscal year 2010.
        The majority of the requested fiscal year 2010 funding increase of
    $28 million is in Stewardship Planning for an operating expense-funded
    project, the Pantex Renewable Energy Project (PREP) at the Pantex
    Plant, that will create a more flexible, more reliable, and
    environmentally friendly source of renewable energy that supports DOE/
    NNSA operating goals and missions. The PREP will generate surplus
    electrical energy, reduce greenhouse gas emissions at local power
    plants, enhance energy security, and create jobs. This modular,
    operating expense-funded project will play a key role in satisfying
    NNSA's renewable energy objectives consistent with DOE Order 430.2B,
    Departmental Energy, Renewable Energy and Transportation Management.
                Defense Nuclear Security
        The fiscal year 2010 congressional budget request for Defense
    Nuclear Security is $749.0 million to support the base program and on
    sustaining the NNSA sites 2003 Design Basis Threat baseline operations,
    and begin initial steps to implement the Department's new Graded
    Security Protection (GSP) policy. During fiscal year 2010, the program
    will focus on eliminating or mitigating identified vulnerabilities
    across the Nuclear Security Enterprise. Funding for one new
    construction start is requested for the Security Improvements Project
    (SIP). The SIP will install a new security system to manage and
    integrate personnel security and access control systems at the Y-12
    National Security Complex.
        Starting in fiscal year 2009, there is no longer an ``offset'' in
    this account or the Departmental Administration Appropriation for the
    security charges associated with reimbursable work. In the fiscal year
    2010 congressional budget request, mission-driven activities will
    continue to be fully funded with direct appropriations, but security
    required for Work for Others will be covered as part of full cost
    recovery for these projects. Institutional security activities will
    continue to be funded by indirect or general and administrative costs
    at each site.
                Cyber Security
        The Cyber Security program will sustain the NNSA infrastructure and
    upgrade elements that will counter cyber threats from external and
    internal attacks using the latest available technologies.
        The fiscal year 2010 congressional budget request for Cyber
    Security is $122.5 million, an increase of 1 percent over the fiscal
    year 2009 appropriations. The Cyber Security program is in the process
    of a major 5-year effort focused on revitalization, certification,
    accreditation and training across the NNSA enterprise. Revitalization
    enables NNSA to respond to its highest priorities and to address
    current and future risks; certification and accreditation assure proper
    documentation of risks and justification of associated operations for
    systems at all sites; and, education and awareness provides training
    for Federal and contractor personnel to meet expanding skill
    requirements of NNSA cyber security and information environments.
                Defense Nuclear Nonproliferation (DNN) Appropriation
        The DNN program goal is to detect, prevent, and reverse the
    proliferation of Weapons of Mass Destruction (WMD). Our programs
    address the threat that hostile nations or terrorist groups may acquire
    weapons of mass destruction or weapons-usable material, dual-use
    production or technology, or WMD capabilities, by securing or
    eliminating vulnerable stockpiles of weapon-usable materials,
    technology, and expertise in Russia and other countries of concern.
        The fiscal year 2010 congressional budget request for the DNN
    appropriation totals $2.1 billion. The most significant fiscal year
    2010 and out-year increases relate to the request to move the funding
    for the MOX Fuel Fabrication Facility project and the WSB back to
    NNSA's DNN Programs. The NNSA has funded the MOX Fuel Fabrication
    Facility project and the WSB baseline increases within the requested
    funding for fiscal year 2010 and the outyears. Other increases include
    International Materials Protection and Cooperation (INMP&C) and
    Nonproliferation and International Security (NIS), both of which
    increase 38 percent over the fiscal year 2009 levels.
        Funding in the INMP&C fiscal year 2010 congressional budget request
    of $552.3 million is an increase of 38 percent over the fiscal year
    2009 appropriated level. This increase is the first step in fulfilling
    President Obama's promise during his Prague address that the United
    States will expand its partnership with Russia and pursue new
    partnerships to eliminate or secure vulnerable nuclear materials. This
    budget provides for sustainability support to Russian warhead and
    material sites with completed INMP&C upgrades, INMP&C upgrades to
    areas/buildings agreed to after the Bratislava Summit and the projects
    to assist the Russian Federation and other partner countries in
    establishing the necessary infrastructure to sustain effective MPC&A
    operations. In addition, the budget provides for the Second Line of
    Defense program and the installation of radiation detection equipment
    at 43 foreign sites and 15 Megaports.
        The fiscal year 2010 congressional budget request for the NIS
    program is $207.2 million, an increase of 38 percent over the fiscal
    year 2009 appropriations. This supports the Next Generation Safeguards
    Initiative (NGSI), which aims to strengthen the international
    safeguards system and revitalize the U.S. technical base and the human
    capital that supports it; as well as nuclear disablement,
    dismantlement, and verification activities in North Korea; policy and
    technical support for U.S. efforts to address proliferation by Iran,
    North Korea and proliferation networks; and the implementation of
    nuclear arms reduction and associated agreements.
        The fiscal year 2010 congressional budget request for the Global
    Threat Reduction Initiative (GTRI) is $353.5 million, a 10.5 percent
    reduction from the fiscal year 2009 appropriations. Most of this
    decrease results from the completion of the Kazakhstan Spent Fuel work
    in CY 2010. The fiscal year 2010 congressional budget request of $24.5
    million for the Elimination of Weapons Grade Plutonium Production
    (EWGPP) is the final increment of U.S. funding needed for this program.
    The significant reduction in the budget reflects close-out and
    completion of the construction activities for the Zheleznogorsk
    Project.
        The Nonproliferation and Verification R&D program is requested at
    $297.3 million, a decrease from the fiscal year 2009 level. This
    decrease reflects both an unrequested congressional addition in 2009
    and NNSA's funding in 2009 of the total required in 2009 and 2010 for
    the Physical Sciences building in Washington State. The $297.3 million
    is sufficient to support long-term R&D leading to detection systems for
    strengthening U.S. capabilities to respond to current and projected
    threats to national and homeland security posed by the proliferation of
    nuclear weapons and diversion of special nuclear material. Almost a
    third of this funding is for production of operational nuclear
    detonation detection sensors to support the Nation's operational
    nuclear detonation detection and reporting infrastructure through joint
    programs with DOD.
        The President's Request for Fissile Materials Disposition is $701.9
    million, reflecting the transfer of funding for the MOX Fuel
    Fabrication Facility project and WSB projects back to this program. In
    addition to these U.S. plutonium disposition activities, the program
    supports three other principal elements: efforts to dispose of U.S. HEU
    declared surplus to defense needs primarily by down-blending it into
    low enriched uranium; technical analyses and support to negotiations
    among the United States, Russia, and the International Atomic Energy
    Agency on monitoring and inspection regimes required by a 2000 U.S.-
    Russia plutonium disposition agreement; and limited support for the
    early disposition of Russia's plutonium in that country's BN-600
    reactor including U.S. technical support to oversee work in Russia for
    early disposition of Russian weapon-grade plutonium in fast reactors.
    The United States and Russia began negotiations on amendments to the
    2000 Agreement in 2008, and expect to complete the negotiations this
    summer.
                Naval Reactors Appropriation
        The NNSA's Naval Reactors program continues to provide the U.S.
    Navy with safe, military effective nuclear propulsion plants and ensure
    their continued safe and reliable operation. The fiscal year 2010
    congressional budget request for Naval Reactors is $1,003.1 million, an
    increase of 21 percent over the fiscal year 2009 appropriations.
        This increase provides additional funding to initiate the new
    mission work for the design and delivery of a new reactor core and
    propulsion plant to support the next-generation submarine design, and
    refueling of the S8G Prototype, one of two land-based reactor plant
    prototypes that serve as a testing platform for nuclear technology.
    Significant outyear funding is required for both of these activities. A
    portion of the fiscal year 2010 increase will also support Naval
    Reactors pension responsibilities.
                Office of the Administrator Appropriation
        This appropriation provides corporate direction, Federal personnel,
    and resources necessary to plan, manage, and oversee the operation of
    the NNSA. It provides funding for all Federal NNSA staff in
    Headquarters and field locations except those supporting Naval Reactors
    and the Secure Transportation Asset agents and transportation staff.
        The fiscal year 2010 congressional budget request of $420.8 million
    reflects a decrease of $18.4 million that is attributable to
    Congressionally-directed projects funded in fiscal year 2009. Staffing
    increases in fiscal year 2010 by 28 full time equivalents (FTEs) from
    1,942 to 1,970 reflecting functional transfers and growth to
    accommodate mission program increases. The projected staffing level for
    fiscal year 2010 is 1,970 and is maintained throughout the outyear
    period. The Historically Black Colleges/Hispanic Serving Institutions
    programs will continue through fiscal year 2010 on grants made by
    appropriations provided in fiscal year 2009 and through program
    funding. The fiscal year 2010 congressional budget request includes
    $4.1 million for the Massie Chairs and related activities only.

        Senator Dorgan. Mr. D'Agostino, thank you very much. I
    appreciate very much your appearance and the appearance of
    Brigadier General Harencak and Ken Baker as well.
        Let me just make a quick comment first. I noted that an OMB
    document earlier this year called for a study of moving the
    NNSA out of the Department of Energy and into the Department of
    Defense. It reminds me that bad ideas have unlimited shelf life
    here in the Nation's capital, and also that bad ideas are
    bipartisan.
        This is a bad idea that has been debated and long ago
    discarded. So if you get a chance to talk to OMB, would you
    suggest that they close the cover of that book and move on?
        Mr. D'Agostino. Yes, sir. I will be glad to.

                FUTURE OF THE LOS ALAMOS NEUTRON SCIENCE CENTER

        Senator Dorgan. Thank you very much.
        I understand that the budget proposal that you are here to
    discuss proposes eliminating funding for the refurbishing of
    what is called the Los Alamos Neutron Science Center, or the
    LANSCE facility. We have an OMB passback calling for canceling
    this project. So perhaps it was not your decision, but there is
    no funding for LANSCE refurbishment in the 2010 request, though
    it was provided $19 million in last year's request.
        I am told that there is no other classified facility
    capable of the scientific research being conducted at LANSCE. I
    am told to replace the LANSCE facility or to make another
    facility, such as SNS, at Oak Ridge classified would be more
    expensive than refurbishment.
        So, a couple of questions, do you believe that LANSCE is
    important to the Stockpile Stewardship Program?
        Mr. D'Agostino. Yes, I do, sir.
        Senator Dorgan. Considering the age of the stockpile and
    non-proliferation treaties, do you think keeping the LANSCE
    facility operating in the future will be important for the
    country?
        Mr. D'Agostino. Absolutely. I think it will be useful to
    help us in neutron cross-section measurement, which is what it
    is doing right now, and to exploring what we call proton
    radiography, which is a different way of examining what is
    actually going on inside very dense materials, and to do the
    nuclear science and material science work. We think the country
    needs that in the future.
        Senator Dorgan. Without refurbishment, how long is the
    LANSCE expected to be an effective facility?
        Mr. D'Agostino. That is a tough question to answer. Most of
    what we are doing right now is accepting risk if we don't
    refurbish the facility, risk that the accelerator pieces are
    going to get to a point where they will age out. Already some
    of the components are hard to replace.
        So what we are in right now is a maintenance mode, keeping
    it working. In fact, that is our plan out into the future--
    keeping the facility working out into the future. My goal is to
    revisit this discussion or revisit the question because I do
    think, in the long run, what we do with LANSCE ultimately has
    to be integrated with the bigger picture on science and the
    technology that we need to maintain out in the future.
        And so, my goal would be to essentially make sure it keeps
    operating, one; keep doing the experiments that we need, two;
    and three, figure out, make sure that we have an integrated
    picture post NPR, once the NPR is done, that figures out how
    science and technology fits in.

                             SCIENCE FUNDING TRENDS

        Senator Dorgan. Well, at this point, we are not talking
    about the Reliable Replacement Weapon, or the RRW program, but
    we are talking about stockpile stewardship, which I understand
    is increasingly reliant on science. So the question is, given
    the heavy reliance on science for stockpile stewardship and
    reliability, how do we reconcile flat funding in the area of
    science?
        Mr. D'Agostino. What we did, as a result of a number of
    changes that have happened over the last 3 months, frankly, I
    have decided that it was much more important to make sure that
    we stem and stop the decrease in our science programs that was
    happening, as you noted in your remarks earlier. And so, what
    we did is some reallocation, quite frankly, in the last few
    months, about $130 million worth to stop the decrease where
    science was going, and then--what I would call stop the
    bleeding, and then start getting in on the repair side.
        So where are we right now, it is my plan, at least, this is
    the low point on science is stopping the decrease, and then we
    are going to need to be reinvesting out into the future, fiscal
    year 2011 budgets and the like.
        You will notice, sir, and as you have said, the numbers are
    exactly the same. And you said, was that coincidence or what?
    It is not--what are the chances of having an exact same out-
    year number? And its chances are zero. And the reality is I
    have submitted to you or to Congress--the President has
    submitted to you essentially a program that says this is a 1-
    year look. The administration has just come in, established
    some very aggressive and some broad goals that it wants to
    implement in the nuclear security arena.
        And because of that, some of these programs, the idea of
    securing materials worldwide in 4 years; as you mentioned, this
    Comprehensive Test Ban Treaty piece; fissile material cutoff
    piece; the new START Treaty; the dismantlements; those require
    a fair amount of detailed program planning that we are doing
    right now. And we didn't have time to reflect that
    appropriately in the out-year budget request. So you will see
    these strange-looking numbers, and that is why.

                           NUCLEAR NON-PROLIFERATION

        Senator Dorgan. Given what has happened in the world in
    recent days, weeks, months, it seems to me that the issue of
    nuclear non-proliferation is unbelievably important. It is
    something people don't talk about in coffee shops. I understand
    that. It is not part of the contemporary debate on talk shows.
    But it is unbelievably important.
        It appears that that account is flat-funded, and the
    President announced his goal to secure all nuclear material
    around the world by 2012. As I understand it, a team of
    officials was sent to Moscow some weeks ago to begin
    negotiations for replacing the START Treaty. Last week, North
    Korea, we think, set off their second nuclear weapon in 3
    years.
        With such increased emphasis on the need for nuclear test
    monitoring, verification research and those kinds of activities
    in the nuclear non-proliferation budget, how is it that the
    research and verification is reduced significantly? I mean does
    that square with anything that I just described or with
    anything that you believe?
        Mr. D'Agostino. I will explain how it squares. I do believe
    out into the future, you will be seeing a fairly different
    program from us. But let me start off with the following, if I
    could. You mentioned North Korea. And I would like, Mr. Baker,
    if you could, to talk to some of the details on the research
    and development program.
        The intelligence analysts that this country has used over
    the last--well, certainly very aggressively over the last 10
    days or so, but obviously, in the previous years, that analyze
    what is happening in the world, both nuclear smuggling,
    proliferation of not just materials, but components, missile
    technology, and the like. Most of those experts ultimately
    come, as you are probably aware, from this program, and they
    start off at the base. They start off in the General's program,
    and they end up being supportive to the intelligence agencies
    and the like.
        So we know what we know because of those folks. Ken Baker
    can talk about the research and development program and why the
    budget changes the way it does.
        Mr. Baker. I agree with you, Senator. It is a very
    dangerous world out there, probably more so than ever, even
    when we were back in the cold war, in my opinion.
        The research and development program has been reduced. The
    reason why it has been reduced this year, we had an $85 million
    plus-up last year over the President's budget, and we have
    finished the work at the Pacific Northwest laboratory, which
    was something like $40 million. That program is down. It is
    critical to us. It will be critical in the CTBT. It will be
    critical in START.
        It is a very important program, and again, I think you will
    see in the next years, as we work this 4-year plan, that
    budgets will increase in the future.
        Senator Dorgan. Senator Bennett?
        Senator Bennett. Thank you, Mr. Chairman.
        And I would like to follow up on the line of questioning
    you have already begun.

        IMPACT OF FLAT-FUNDING ON WEAPONS AND NON-PROLIFERATION PROGRAMS

        Mr. D'Agostino, you say funding is level, but, in fact,
    there are internal demands that make the amount of money that
    actually--to use an analogy that we have out in the West, the
    amount of water that actually gets to the end of the ditch is
    smaller than the overall numbers would indicate. I am talking
    about the pension shortfalls.
        It is my understanding that you have to make up some of the
    pension shortfalls of your contractors. Is that correct?
        Mr. D'Agostino. That is correct, Senator.
        Senator Bennett. All right. The numbers I have say that the
    contributions paid to DOE contractors in their pension plans
    from 2008--2003 to 2008 was $330 million, and you expect to pay
    $1.5 billion per year over the next 5 years, with the peak
    contribution years estimated to come in 2012 and 2013 at just
    under $2 billion per year.
        Now if you are going to deduct most of the savings out of
    the operating budget and delay facility closures and preventive
    maintenance and consolidation of special nuclear materials,
    obviously the top-line number is deceiving. So I think the
    trend is simply unsustainable. It will have a devastating
    impact on the weapons and non-proliferation program, and I want
    to know what the Department has considered, actions being taken
    to mitigate this problem over the next 5 years.
        Mr. D'Agostino. Yes, sir. You are absolutely right. With
    those kinds of numbers with no changes, that is an
    unsustainable path. It is an unsustainable program. But I will
    tell you what the Department has done at this point. And what
    the Department, I say the administration has done, quite
    frankly.
        One is when we first started this year, we were faced with
    this immediate problem. So we looked in just fiscal year 2009
    at areas where programs weren't spending, we didn't see the
    expenditure rate, things had gotten slow to start, and we
    figured out what could shift back a little bit. And we also
    made some adjustments to our overhead rates to get through
    fiscal year 2009. Otherwise, we would have been in the process
    of sending out literally tens of thousands of letters to all of
    our employees saying that their pension fund is underfunded.
        So that took care of fiscal year 2009. And for fiscal year
    2010, which is the current budget, we have received an
    increase. The total liability is on the order of close to $300
    million that we were potentially expecting in 2010. So what we
    received is an increase of about $122 million in order to
    address specifically the pension shortfall in our fiscal year
    2010 budget. That leaves, of course, $160 million of
    uncertainty.
        The way the pension process works, and I apologize for
    giving the long answer, is every January we go off and take a
    look at where we are, kind of a snapshot look. And that sets
    the trend for the upcoming year. This past January, we thought
    next year would be worse, and that is why we have come up with
    $122 million.
        We don't know what January is going to look like. So what
    we have taken is a big step in the right direction toward
    addressing our 2010 shortfall with the understanding that the
    financial situation will be different in January. It might be
    worse. It might be better. But we wanted to at least approach
    the solution with the backup plan to make some adjustments to
    our indirect rates. That kind of will spread the problem a
    little bit more broadly.
        So it is a dynamic problem, we look at it on a monthly
    basis. And this is, unfortunately, we are in a situation where
    we are going to be looking at it on this regular basis out into
    the future. But in the end, it is going to require, I believe,
    increases to top lines if we continue to see the past
    performance.
        Senator Bennett. That is the point I wanted to make and
    want to have clear on the record, that, at some point, the top
    line has to go up, or everything else suffers from it. We are
    in a fool's paradise if we say, ``Oh, we are keeping the
    funding level,'' when, effectively, we are not for these
    reasons.
        Mr. D'Agostino. Yes, sir.

      RESEARCH INTEGRATION BETWEEN THE DEPARTMENT OF ENERGY AND NATIONAL
                        NUCLEAR SECURITY ADMINISTRATION

        Senator Bennett. Now let us talk about the need for
    scientific leadership within NNSA. I think we need to consider
    a new position within NNSA to steward and cultivate scientific
    research.
        Such an individual could help raise awareness of both
    weapon science and non-weapon science that goes on at the labs
    and work to integrate research among the DOE and NNSA labs. And
    the grand challenge of energy security and climate change
    science are of such complexity that this work, I think, should
    be shared with all the labs. I had reference made to that when
    I was out in the labs, when you were kind enough to give that
    tour.
        So I am considering a modification to the NNSA Act to
    create a new position within NNSA that would report directly to
    you, and it would--this position would lead the NNSA science
    program and work with the rest of the Department to integrate
    the national security capabilities with those in basic applied
    programs within DOE. Can you give me your reaction to that
    idea?
        Mr. D'Agostino. Yes, sir. Though not part of the NNSA Act,
    I think consistent--particularly after our trip that we took
    about a year and a half ago sir, we talked about the importance
    of science. Dr. Dave Crandall, who used to run the Research,
    Development, and Simulation Program in the weapons program, I
    brought him up to advise me. He doesn't have an official role,
    if you will, as you have described, from an authority
    standpoint. But in effect, he is doing some of that work as a
    chief scientist.
        I think the idea of having a named position is a good idea.
    It is very consistent with our drive to not so much focus just
    on nuclear weapons science, but to focus on nuclear security
    science, which will address non-proliferation,
    counterterrorism, forensics, and then, more broadly, work with
    the rest of the Department, the Office of Science, to draw
    those links together and show how these computers and these
    people can address global problems.
        So I am very favorably disposed to your suggestion, sir.
        Senator Bennett. All right. Well, I am glad you are using
    Dr. Crandall. But he has no budget authority and no mission
    responsibility.
        Mr. D'Agostino. Right.
        Senator Bennett. And so, I will be talking to you about how
    we might proceed on that.
        Mr. D'Agostino. Yes, sir.
        Senator Bennett. Thank you, Mr. Chairman.
        Senator Dorgan. Senator Feinstein?
        Senator Feinstein. Thank you very much, Mr. Chairman. I
    trust this mike is not working.
        Senator Dorgan. Turn it on and speak directly into it, if
    you would?
        Senator Feinstein. Hello? It is working.

       NUCLEAR POSTURE REVIEW, WEAPONS TREATY NEGOTIATION, AND STOCKPILE
                                   REDUCTION

        Mr. D'Agostino, it is my understanding, and the chairman
    touched on this, that you are involved in two efforts. One is
    the negotiation for a new nuclear weapons treaty with Russia,
    and the other is the Nuclear Posture Review that is due out the
    early part of 2010.
        It has been reported that this new treaty could set a new
    ceiling of 1,500 operationally deployed nuclear warheads for
    each nation, down from 1,700 to 2,200 under the Moscow treaty.
    Is that, in effect, true?
        Mr. D'Agostino. There are a lot of numbers. The short
    answer is we haven't closed on the details. There are a lot of
    numbers being bantered around. The President has made it very
    clear that he wants a number lower than the 1,700 to 2,200
    number.
        Where we are right now in the Nuclear Posture Review, which
    is the kind of committee of people that will be briefing the
    National Security Council and, ultimately, the President, quite
    frankly, in the next relatively short period of time, we are in
    the discussion phase of examining the policy. What is the
    policy that the Nation wants to carry forward into the future?
    And what size of stockpile is needed to maintain that policy
    strongly?
        There is a 1,500 number floating around out there. There
    are some lower numbers. There are some higher numbers, and I
    would rather not try to make a commitment right now.
        Senator Feinstein. Yes, all right. Well, that is fine. I am
    for the lowest possible number, as you know.
        Mr. D'Agostino. Yes, ma'am.
        Senator Feinstein. I think the buildup of huge nuclear
    weapons, 90 percent of which are owned by Russia and the United
    States, really endangers the world and really opens us up to
    all kinds of problems. So you know my views on this subject
    well.
        Mr. D'Agostino. Yes, ma'am.

             COSTS AND RESULTS OF NUCLEAR LABORATORY PRIVATIZATION

        Senator Feinstein. What is the total loss of employees at
    our nuclear labs since the privatization?
        Mr. D'Agostino. We have lost--as I have looked at the
    numbers going back in time for the last 3 or 4 years or so, the
    NNSA overall has changed, if you will, about 1,500--I will get
    to your answer. But overall, about 1,500 folks a year or so out
    of the 32,000, which we started off with, have been coming out.
        Senator Feinstein. Well, what is the total? I know it is
    over 2,000 at Los Alamos alone.
        Mr. D'Agostino. Yes, it is. The total is probably between
    3,000 and 3,500, give or take. It depends if we are counting
    not full-time lab employees, but temporary lab employees. But,
    in essence, it is in the thousands. It is a fairly significant
    number. It is a number that was about 2,500 or so last year
    when we talked to you, talked to the subcommittee here last
    year.
        It is a number that, for the most part, the lab directors
    have focused on driving these changes not with their scientists
    or engineers, though they have had to get into that some. But
    most of these reductions have happened as a result of
    administrative personnel being more efficient, quite frankly.
    And George Miller has got some good examples.
        Senator Feinstein. I am not talking necessarily about any
    one particular lab. I can tell you this. When I visited Los
    Alamos, the most significant thing I took away from it was the
    lack of people in that facility.
        Mr. D'Agostino. Right.
        Senator Feinstein. And I am concerned by it. And I remember
    the budget last year and the year before when you have these
    enormous fees to run these labs and those fees have been paid
    by cutting employees. And I think that is just a fact.
        Now the question comes, what does this do to the mission?
    And I am very concerned about it because I think the mission is
    subtly changing, the mission of the labs. I think the
    privatization is toward pushing things into the private sector,
    and the purpose of these labs is really to do some of the most
    advanced work that keeps this Nation ahead of others. And I am
    very worried about it and not at all sure that it is the right
    thing to have done.
        So let me ask you this question. Since the privatization,
    what would you name as the three big achievements produced by
    privatization?
        Mr. D'Agostino. What I would say the first achievement is
    on security. We have seen some huge improvements in security at
    both of the laboratories since privatization.
        Senator Feinstein. Okay, granted. And that is where the
    university was weak, and that has been picked up, and the
    security has improved. What else?
        Mr. D'Agostino. The other area is in management systems.
    Frankly, Los Alamos, for example, spread out over 43 square
    miles, was, in essence, a balkanized set of smaller
    laboratories, each operating slightly different procedures and
    procurement processes. It was very inefficient and caused
    problems.
        So the new management has drawn the lab together much more
    tightly and has driven----
        Senator Feinstein. Okay, and a third?
        Mr. D'Agostino. And has driven----
        Senator Feinstein. My time is going to--it is up, so a
    third?
        Mr. D'Agostino. Oh, okay. The third area I would see is
    focus. We have seen the kind of responsiveness to driving
    change and just as you described it very clearly, mission
    change. I would look at mission change to shifting from a cold
    war mission focus to a future world mission focus. I have seen
    movement on both of those laboratories and, in fact, working
    together, the two laboratories working together on establishing
    a new mission that I haven't seen in previous years.
        And I have worked in this program for a number of years
    and, quite frankly, am very impressed with the focus that Norm
    Pattiz has driven, as the Board of Governors, into making sure
    that there is responsiveness to the Government there. I
    recognize that there are downsides, too, ma'am, as well, as we
    talked about.
        Senator Feinstein. Well, I just--in one sentence. I would
    agree that there have been administrative changes, security
    changes, and that is good--at a tremendous price.
        And I am still--and maybe there is focus, but what I want
    to see is, what is the increased productivity in terms of
    benefit to the Nation? Candidly, I haven't seen it. So if it is
    there, I would hope you would advise me of it as time goes on.
        Mr. D'Agostino. I would like to do that, and I would
    actually like to take that for the record, if I could, and then
    provide that in writing?
        Senator Feinstein. I would be happy if you would do that.
        Senator Dorgan. Well, before the Senator from California
    leaves, we have had testimony from some laboratory directors
    about the substantial increased cost of the contracts to
    supervise these laboratories. We have also had some testimony
    about how these costs have ratcheted up, up, way up in a very
    dramatic fashion, and that eats into the ability to retain the
    scientists.
        I would like to understand this. I understand your answer
    that there have been some benefits, and I accept that security
    and other things. But it is also the case, isn't it, that the
    substantial increase in costs of these contracts to manage
    these laboratories by the private sector have increased? Could
    you send us some analysis of the weapons labs so that we can
    understand what those increases have been?
        Mr. D'Agostino. I would like to do that, Senator. I think
    that would be great. Or I could answer it now? It depends on
    how much time you have, sir.

                          LASER-POWERED FUSION ENERGY

        Senator Dorgan. Well, I want to ask Senator Feinstein to
    ask a few questions about the fission/fusion observation she
    saw because I am also interested in that. If you have time and
    you want to ask those questions, let me yield to you so that we
    can hear that discussion.
        Senator Feinstein. All right. The place is amazing. I have
    never seen anything like it. It truly looks like Star Wars. And
    the fact that you can get all of these lasers concentrating on
    this little tiny target of hydrogen encased in this gold pellet
    that goes ``boom'' and pushes out all of this energy. Now this
    just in my layperson's first blush is truly amazing.
        I think a purpose of the lab--or of this program,
    obviously, is to see that our nuclear weapons are safe without
    testing, and the assumption is that it will be able to do it.
    But the promise for the future is so great in terms of nuclear
    science and what nuclear science might produce as we develop
    the green economy. I mean, that is kind of the way I see it,
    but you may differ with that, Mr. D'Agostino?
        Mr. D'Agostino. No, ma'am. You have actually characterized
    it quite well. The three main purposes, first of all, the
    primary purpose is to support the deterrent. And frankly, I
    call it building that core group of varsity science team people
    that we need to address the non-proliferation problems that the
    country faces, the forensics and intelligence analysis that the
    country needs. That is number one.
        Number two, obviously, is advance the basic science. And
    number three, you have hit on it, is this idea that there is
    the opportunity to bring fusion into the picture to address a
    carbon-free kind of energy environment.
        So what I would say on the third element, which, of course,
    is kind of nirvana in some respects, and we will describe it
    that way, is the first step is to get to ignition. And we can't
    get to fusion without ignition. So our focus, our eyes will be
    focused in 2010 on getting a first credible ignition experiment
    and then seeing where that goes.
        The laboratory clearly has some proposals in that area on
    what the next step might be. I love the enthusiasm of the
    scientists and engineers there. It is captivating. It is
    energizing. I also want them to be pragmatic and realistic
    because I need to come and tell you what we believe we need in
    order to have an effective program.
        I believe it is time to start thinking about the next step,
    but it is not time to start figuring out, start pouring
    concrete because we are not quite there yet. So the first step
    is to do the ignition experiments, get success on fusion here
    on Earth. It has never been done before. It is a real tough
    problem.
        As Ed Moses said, Mother Nature is a tough person to deal
    with, and that reality is there. But it is quite exciting about
    what the future may hold.
        Senator Feinstein. Tom Friedman visited the lab last month
    and wrote a column, and he said if this thing works, it is a
    ``holy cow'' game changer. And that is the fusion, and I guess
    eventually fission then, that is to keep the waste down, right?
        Mr. D'Agostino. The idea is fusion will release a
    tremendous--yes, ma'am. The fusion will release a tremendous
    amount of X-rays and neutrons that can ultimately be used to
    burn up, in effect, waste to these actinides and deal with what
    they call a fusion/fission hybrid. It is this idea of taking--
    --
        Senator Dorgan. But pure fusion consumes its waste, doesn't
    it?
        Mr. D'Agostino. Pure fusion only generates helium, which is
    the helium gas. So it is not a problem. So, in effect, it
    doesn't really generate the kind of waste we see from fission,
    which generates these highly radioactive wastes. But what it
    does do, sir, is generate these neutrons and X-rays that can go
    help us burn up these materials that we would like to get rid
    of, ultimately.
        Senator Dorgan. As you can tell, we have a very strong
    scientific background here.
        Mr. D'Agostino. You did very well, sir.
        Senator Dorgan. The cloture vote just started, just an
    observation. I toured a lab the other day. It reminded me when
    you talked about lasers. Lasers are used for so many things. I
    toured a lab the other day in which they are using
    sophisticated computer technology and lasers to target female
    mosquitoes. Those are the ones that bite.
        Senator Feinstein. As all species.
        Senator Dorgan. I couldn't have said that. But at any rate,
    they can target over a 100-yard area all the mosquitoes and
    target the female mosquitoes, destroy the mosquitoes with
    lasers. It is pretty extraordinary, part of what they are
    trying to do is deal with malaria and other issues.
        At any rate, again, Mr. D'Agostino, we have a cloture vote
    that has started. What I would like to do is I have other
    questions, and I want to send you a list of questions and ask
    that you would respond for the record as we begin to get down
    the road here and evaluate what we might want to do on the
    appropriations side.
        I do want to say to you that I think this subcommittee has
    an advantage in working with you, and we appreciate you and
    your colleagues who have joined you today, the work that you
    are doing. These are challenging times, and I think a lot of
    the discussion has been about Earth-penetrating, bunker-buster
    weapons, or RRW, or a whole ranging of things over recent
    years.
        Life extension programs and stockpile stewardship are
    critically important, but now, especially now, the issue of
    non-proliferation and nuclear intelligence and those things, we
    are going to rely on your agency in a very significant way. And
    we need to have the best people there. We need to have adequate
    funding. In many ways, our future depends on that.

                         ADDITIONAL COMMITTEE QUESTIONS

        So let me thank you and your colleagues for being here, and
    we will be submitting additional questions for the record.
        Mr. D'Agostino. Thank you, sir. And thank you, Senator
    Feinstein. I appreciate it.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                Questions Submitted by Senator Dianne Feinstein

                                NUCLEAR WEAPONS

        Question. As you know, Congress, on a clear bi-partisan basis,
    eliminated all funding for the Reliable Replacement Warhead program in
    fiscal year 2008 and fiscal year 2009. I am pleased that the
    administration has requested no funding for this program in its fiscal
    year 2010 budget request. This is good news.
        What factors led the administration to request no funding?
        Answer. The decision to terminate the RRW program was a
    Presidential decision and is fully supported by NNSA. NNSA will
    continue to assess the requirements to maintain our aging nuclear
    deterrent. While doing so, NNSA will ensure that all weapon activities
    designed to ensure the longevity of that deterrent are properly
    integrated with the overall nuclear security strategy being formulated
    in the Nuclear Posture Review.
        Question. In your testimony, you state: ``. . . we are concerned
    about increasing challenges in maintaining, for the long term, the
    safety and reliability of the aging, finely tuned warheads that were
    produced in the 1970s and 1980s and are well past their original
    planned service life''.
        Are you leaving the door open for reviving RRW at a later date? Can
    we say that the program is dead?
        Answer. The RRW program has been terminated and will not be
    revived. We will by necessity have to address critical stockpile
    challenges through the Life Extension Program (LEP), such as the need
    to enhance weapon safety and security, address aging systems that have
    a low performance margin to failure, or use exotic and hazardous
    materials.
        Question. The administration has begun to negotiate a new nuclear
    weapons treaty with Russia with the goal of concluding an agreement by
    the end of the year. A new Nuclear Posture review is also due by the
    end of the year and I am pleased that the National Nuclear Security
    Administration is actively engaged in both efforts.
        How will the Nuclear Posture Review influence the size of the
    reductions in each nation's stockpile?
        Answer. The NPR made it an early priority to accomplish the
    analysis necessary to support the START Follow-on treaty negotiations,
    which President Obama and President Medvedev directed should be
    completed before START expires in December 2009. This analysis has
    concluded that maintaining a nuclear triad with a bilaterally
    verifiable reduced number of operationally deployed strategic nuclear
    weapons and accountable strategic delivery vehicles would enhance our
    national security objectives and continue to provide extended
    deterrence to allies and friends. As a result, President Obama reached
    a Joint Understanding with President Medvedev in July, stating that ``.
    . . each party will reduce and limit strategic offensive arms so that 7
    years after entry into force of the treaty and thereafter, the limits
    will be in the range of 500-1,100 for strategic delivery vehicles, and
    in the range of 1,500-1,675 for their associated warheads. The specific
    numbers to be recorded in the treaty for these limits will be agreed
    through further negotiations.'' Strategies for augmentation forces and
    non-strategic weapons are still under review by the NPR team. For more
    information on pre-decisional Nuclear Posture Review topics, please
    contact:
        Note.--Source: Dr. Bradley Roberts, Deputy Assistant to the
    Secretary of Defense for Nuclear and Missile Defense Policy Co-
    Director, 2009 Nuclear Posture Review.
        Question. It has been reported that the new treaty could set a new
    ceiling of 1,500 operationally deployed nuclear warheads for each
    nation, down from 1,700 to 2,200 set by the Moscow Treaty.
        Is that your understanding? Can we go lower?
        Answer. NNSA will maintain the stockpile the President deems
    necessary to support our national security. In July, President Obama
    reached a Joint Understanding with President Medvedev, stating that ``.
    . . each party will reduce and limit strategic offensive arms so that 7
    years after entry into force of the treaty and thereafter, the limits
    will be in the range of 500-1,100 for strategic delivery vehicles, and
    in the range of 1,500-1,675 for their associated warheads. The specific
    numbers to be recorded in the treaty for these limits will be agreed
    through further negotiations.'' The NPR is continuing analysis of
    alternative strategic approaches beyond the immediate confines of the
    START Follow-on negotiations to frame options for strategic nuclear
    decisions for the next 5-10 years. This analysis includes investigating
    possible future security environments in which relations with Russia
    dramatically improve, as well as implications if the START Follow-on
    treaty does not enter into force or if reset of the U.S.-Russian
    relationship does not continue.

                        NUCLEAR NONPROLIFERATION EFFORTS

        Question. I firmly believe that ratification of the Comprehensive
    Test Ban Treaty is critical to reclaiming U.S. leadership in the
    nuclear nonproliferation field and bringing us closer to a world free
    of nuclear weapons. Does the National Nuclear Security Administration
    support ratification of the Comprehensive Test Ban Treaty?
        Answer. NNSA certainly supports the administration's decision to
    seek ratification of the CTBT. We are confident that the science-based
    Stockpile Stewardship program, when linked with weapon system
    surveillance and life extension programs, will assure weapon safety,
    security, and effectiveness. The same high level of technical expertise
    and relevant experience that NNSA applies to stockpile management
    without underground testing also allows NNSA to play a leading role in:
    (1) preventing other states from evading the Treaty; (2) supporting the
    establishment, sustainment, and operation of the International
    Monitoring System, the CTBT On- Site Inspection regime, and other
    elements of the CTBT verification system; and (3) sustaining and
    improving U.S. National Technical Means to ensure viable independent
    treaty verification.
        Question. I applaud your commitment to supporting President Obama's
    goal of securing all vulnerable nuclear materials from around the world
    within 4 years. What do you need from Congress to meet this goal? What
    programs will be involved? What are the key challenges?
        Answer. The President's April 5, 2009, Prague speech outlined an
    ambitious strategy to address the international nuclear threat,
    including measures to reduce and eventually eliminate existing nuclear
    arsenals, halt proliferation of nuclear weapons to additional states,
    and prevent terrorists from acquiring nuclear weapons or materials. As
    part of this strategy, the President announced a new American effort,
    working with our international partners, to secure vulnerable nuclear
    materials around the world within 4 years. NNSA will play a key role in
    these efforts, together with our colleagues at the Departments of
    State, Defense, and other key U.S. interagency and international
    partners.
        NNSA's Defense Nuclear Nonproliferation office already partners
    with over 120 countries to address global nuclear proliferation and
    nuclear terrorism threats. However, contributing fully to the
    President's goal to secure all vulnerable nuclear material worldwide
    within 4 years will require expanding our cooperation with Russia and
    other key countries, pursuing new partnerships to secure materials, and
    strengthening nuclear security standards, practices, and international
    safeguards. The administration is working to identify priorities for
    expanding and accelerating U.S. nonproliferation and nuclear security
    efforts overseas with available resources. Key challenges in
    contributing NNSA workscope to help achieve the administration's
    nuclear security vision relate to obtaining the necessary agreements
    from sovereign countries for this cooperation, as well as the need for
    related legal agreements and, in a few cases, new technological tools.

                                  WEAPONS LABS

        Question. A few years ago, the U.S. Government privatized the DOE
    weapons labs, including Lawrence Livermore National Lab in California.
    Soon after, it became clear that the decision had changed the economy
    situation at the lab. With a need to pay both taxes and produce a
    profit, the lab made significant cutbacks in employment, from 5,872 to
    5,715 employees.
        Now a few years into this process, what do you see as the benefits
    of privatizing this lab? Please be as specific as possible. Do you
    believe these benefits still outweigh the costs?
        Answer. Lawrence Livermore National Security, LLC (LLNS) took over
    management of the Lawrence Livermore National Laboratory (LLNL) from
    the University of California (UC) in October, 2007. It is true that
    moving from a contractor that is a non-profit educational institution
    to a for-profit entity costs the Government more in taxes and
    management fee. At the same time, since LLNS took over the management
    of LLNL, the Laboratory's operating budget has declined. The
    combination of these factors has presented the LLNS management team
    with many challenges. Despite these challenges, LLNS has maintained
    UC's record of outstanding performance in the mission and scientific
    areas of work performed for the Government and non-Government sponsors.
        At this point in the 7-year base contract term, it is still too
    early to have realized significant benefits from the contract change.
    However, from NNSA's first annual performance evaluation report
    completed on LLNS in fiscal year 2008, we have seen some marked
    improvements and accomplishments in the following areas of activity:
        Mission:
      --Developed 1st generation 3D energy balance model for weapons
            physics
      --Executed National Ignition Facility project within scope, schedule,
            and budget
      --Accomplished significant computing advancements
      --Executed the TriPod strategy to provide a future common tri-lab
            software system
      --Exceeded goals for removal of special nuclear material
      --Sustained world leading science despite staff reductions
      --Advancements in nonproliferation and threat reduction technical
            capabilities
        Operations:
      --Accelerated safety compliance requirement submissions for all
            nuclear facilities
      --Improved security protection without mission impact
        Business and Institutional Management:
      --Simplified the cost model and upgraded financial systems
      --Successfully executed a challenging workforce restructuring plan
      --Made significant progress in standing up a new contractor assurance
            system --Implemented numerous cost reduction initiatives
      --Contributions of Parent organizations assessments to improvements
        Again, this was LLNS's first year accomplishments. We are currently
    evaluating their second year performance results (fiscal year 2009) and
    have observed further improvements. Based on our overall observations,
    we fully expect that there will be widespread improved results
    throughout the Laboratory in all areas of mission, operations and
    business/institutional management as the LLNS management team fully
    implements the changes it needs in order to become a more effective and
    efficient organization. As this occurs, the Government should begin to
    see the more significant benefits it hoped to realize from the contract
    change.
        Question. On May 23, 130 former employees of Lawrence Livermore
    National Laboratory filed suit against the lab alleging age
    discrimination during layoffs last May.
        I understand you may not be able to comment about this case, but
    what steps have you taken to ensure that labs are getting and retaining
    the best people, regardless of gender, age, or ethnicity?
        Answer. To entice university students to join NNSA, numerous
    intern-like programs that offer extensive training and on-the-job
    experiences are underway to recruit contractor employees including the
    Sandia Nuclear Weapons Intern Program that provides graduate level
    training in nuclear security enterprise operations and Department of
    Defense interfaces, the Nonproliferation Graduate Program for practical
    application in nuclear technologies and nonproliferation, and numerous
    postdoctoral fellowship, grants and intern opportunities. These intern
    programs educate university students about the mission of NNSA and
    offer training and hands-on educational opportunities that aren't often
    found in the private sector.
        To retain the best employees, the NNSA National Laboratories offer
    employees opportunities to participate in cutting edge science through
    the Laboratory Directed Research and Development program and via the
    Work for Others programs. There are also many prospects for employees
    to undertake detail assignments, job swaps, perform in acting
    management capacities, and education reimbursement and training
    opportunities. The goal is to provide challenging, career enhancing
    opportunities to entice experienced and expert employees to stay within
    the NNSA to retain skill sets that take years and years to develop.
                                     ______

                   Questions Submitted by Senator Jon Tester

        Question. In addition to strengthening the administration's ability
    to secure vulnerable nuclear stockpiles in Russia, will budget
    increases for programs like the Nuclear Materials Protection and
    Cooperation help secure weapons in other nations? If so, which ones and
    how are the resources allocated within the agency?
        Answer. Yes, the budget increases will allow our MPC&A program to
    partner with countries beyond Russia to help secure vulnerable nuclear
    materials. As with our work with Russia, this cooperation is tailored
    to an individual country's needs and can consist of security best
    practices sharing, provision of equipment, and related training. We
    would be able to offer a detailed briefing, as appropriate, regarding
    these other priorities.
        Question. In your opinion, Administrator D'Agostino, how far do the
    budget increases for securing vulnerable nuclear weapons and civilian
    stockpile go to do the job? What are the long-term budget needs going
    to be for the United States to help secure all of the most vulnerable
    stockpiles globally?
        Answer. Vulnerable nuclear fissile materials include highly
    enriched uranium (HEU) and plutonium whose physical protection is not
    on par with international standards (e.g., the IAEA guidelines
    published in INFCIRC/225/rev.4) or is otherwise judged to be at risk
    due to the particular threat environment in the country. Consistent
    with the President's April 5, 2009, speech in Prague, the
    administration is working to identify priorities for expanding and
    accelerating U.S. nonproliferation and nuclear security efforts to
    address these vulnerable nuclear materials overseas. NNSA fully
    supports the President's fiscal year 2010 budget request for
    nonproliferation and nuclear security work overseas as it allows us to
    address the highest priorities in achieving the President's
    unprecedented global nuclear security vision. In terms of the long-term
    budget needs for addressing vulnerable nuclear materials worldwide in 4
    years, the administration will continue efforts to identify remaining
    priorities and requirements.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

        NOT ALL SCIENCE FUNDING IS EQUAL--ESPECIALLY AT THE WEAPONS LABS

        Question. Mr. D'Agostino, I am troubled by the disparity in funding
    for applied and fundamental scientific research provided by DOE Office
    of Science labs versus the NNSA labs. Clearly, the cancellation of the
    Los Alamos Neutron Science Center (LANSCE) Refurbishment is the most
    glaring example of the selectiveness of the research funding in the
    budget. The LANSCE facility is the scientific cornerstone of Los
    Alamos, serving both classified and unclassified work and supporting
    over 500 users annually.
        How do you explain the failure in the budget to link the DOE and
    NNSA science?
        Answer. The DOE Office of Science budget is devoted to supporting
    basic science facilities, personnel, and grants that will impact broad
    missions. The NNSA budget has a technically broad but specific mission
    and must balance the fundamental and applied science required for
    stockpile stewardship with the equally important work required for
    directly maintaining the stockpile, and all of the associated
    infrastructure, security, and environmental compliance for the nuclear
    weapons complex. With increasing costs and flat or decreasing budgets,
    we have consequently had to balance investments in research needed to
    address future concerns in order to address immediate stockpile issues
    and aging infrastructure.
        Question. What do you see as the scientific future for Los Alamos
    LANSCE?
        Answer. The principal Stockpile Stewardship (SSP) experiments at
    LANSCE involve conducting measurements of nuclear data for use in
    improving the accuracy of the simulation of nuclear weapon detonations
    and proton radiography of high explosive driven materials. While some
    of these capabilities exist, in part, at other facilities it would be
    necessary to make significant investments at several facilities in
    order to conduct the SSP relevant experiments currently performed at
    LANSCE. The ability to perform classified experiments, experiments that
    utilize high explosives, and stockpile relevant materials all in one
    place is a unique aspect of LANSCE. The Office of Science continues to
    use LANSCE for isotope production, neutron scattering, and materials
    science and we expect this work to continue for the foreseeable future.
        Question. What are your plans for conducting this work after the
    accelerator is gone?
        Answer. We do not plan to close the accelerator. While we plan to
    continue to operate the accelerator for the foreseeable future, it
    isn't really possible to know how long the accelerator will be able to
    operate without refurbishment. The decision on whether to re-invest in
    the infrastructure at LANSCE will be deferred until after fiscal year
    2010. All of the individual components are in principle repairable
    indefinitely, assuming parts are available, but in practice we expect
    that the reliability of the facility will decay without further
    investment. Without aspects of the refurbishment in some form yet to be
    determined, we are accepting increased risk of major component failures
    affecting continued operations.

           STRATEGIC POSTURE COMMISSION--INVESTMENT IN INFRASTRUCTURE

        Question. Mr. D'Agostino, the bipartisan consensus of the Perry/
    Schlesinger Strategic Posture Commission Report was that total
    disarmament is unlikely in the foreseeable future. As such, the
    Commission recommends the NNSA undertake a focused investment strategy
    to ensure a capability is in place to respond to unforeseen military
    challenges and maintain the extended deterrent for our allies.
        The foundation of that capability is the completion of the CMR-
    Replacement facility (Los Alamos) and the UPF Facility at Y-12 (Oak
    Ridge, TN). These facilities replace 1950's era facilities that are not
    protective of worker health and safety, and the Defense Nuclear
    Facilities Safety Board recommends they should be closed as soon as
    possible.
        Given the unique responsibility of each facility and likelihood
    that the United States and Russia won't agree to eliminate their
    respective stockpiles when do you anticipate making a decision on the
    fate of these facilities and what are the decision drivers for this
    decision?
        Answer. Our recently submitted fiscal year 2010 budget reflects a
    transition year for Weapons Account Activities while we complete the
    administration's Nuclear Posture Review (NPR). We are presently
    continuing design work for CMR-Replacement and UPF but have not
    included future construction funding pending recommendations from the
    NPR. I anticipate the fiscal year 2011 budget to be submitted to
    Congress in February 2010 will reflect our decision approach relative
    to these two major nuclear facilities.
        We recognize the need to replace the existing 1950's era facilities
    as rapidly as practical. The drivers for our decision will include the
    specific recommendations in the NPR and our judgment on how to best
    balance the competing needs of our enterprise given the available
    resources. We must achieve the correct balance between sustaining our
    science and technology base, refurbishing or modernizing our stockpile,
    and recapitalizing major facilities that would include constructing the
    CMR-Replacement and UPF.
        Question. Recent press articles reported that the budget request is
    not adequate to sustain the existing design teams and would force
    layoffs. Do you believe this budget request would result in layoffs and
    contribute to further project delays at either of these facilities?
        Answer. Yes. The proposed fiscal year 2010 funding plan will result
    in lower staffing levels for the design teams for CMRR and UPF than
    previously planned. The delay in funding pending the strategic
    decisions of the Nuclear Posture Review (NPR) and related
    considerations will make completion of both projects later than
    originally planned. The administration plans to make decisions about
    these two projects in the broader context of the NPR.
        Question. Your budget will delay the completion of the RLUOB by 1
    year based on this budget estimate. How much more funding is needed to
    complete this facility including acquisition of equipment and
    installation to maintain the current schedule of 2010?
        Answer. The RLUOB will complete construction in September 2009 and
    be equipped and made ready during 2010-2012, with the schedule
    controlled by equipment delivery. The costs of acquisition and
    installation of the RLUOB equipment and related scope to bring the
    facility up to operations are currently estimated at about $199
    million, of which approximately $36 million has been appropriated
    already. The President's budget request plus previously appropriated
    funds adequately support RLUOB and its equipment.
        Question. How much is needed to fund a new start on UPF and CMR-R?
        Answer. NNSA does not contemplate a ``new start'' for either
    project in fiscal year 2010 because the designs are not yet complete.
    The fiscal year 2010 funding request will allow both projects to make
    some design progress and avoid the need for a re-start. The funding
    levels in fiscal year 2010 balance sustaining continuity of the
    projects with minimizing commitment of resources until after completion
    of the Nuclear Posture Review.
        Question. The Defense Nuclear Facilities Safety Board also stated
    unequivocally that NNSA needs to get out of both the CMR and Y-12
    facilities. As a result of the delays created by the budget request,
    what will you tell the Defense Board, the scientists, and staff working
    in the old facilities that fall below the required structural and
    health and safety standards?
        Answer. The CMR facility at Los Alamos and the uranium processing
    facilities (9212/9215) at Y-12 are old, past-end-of-life facilities.
    Although these facilities are about 60 years old, we are maintaining
    and operating these facilities in a safe and secure manner. Over the
    past decade, we initiated actions and took proactive steps to reduce
    the hazards at these facilities. For example, improvement of facility
    safety systems, reduction of nuclear material inventories,
    implementation of new safety controls, etc., were some of the actions
    taken to enhance both the public and worker safety. This approach,
    however, does not fix the root problem of end-of-life infrastructure
    and is a temporary approach. Additional infrastructure investments will
    be needed to continue to safely operate these facilities until
    replacement facilities become available.
        Until replacement facilities are available for both CMR and Y-12
    facilities, we will continue to safely operate and maintain the
    existing facilities but at increasing costs, and manage increasing
    program vulnerability and safety risk. At CMR, risk reduction steps are
    being implemented through the CMR Facility Consolidation and Risk
    Mitigation Program. At Y-12, risk mitigation activities will be
    implemented through investment in the Facility Risk Reduction Program.
    In the absence of a decision on replacement facilities, dedicated
    commitment for increased operations funding would be required to
    continue to safely operate these facilities.
        transferring the tritium mission is a waste of taxpayer dollars
        Question. Mr. D'Agostino, last year, an independent study of the
    proposed transfer of the tritium R&D and design missions found that
    there was ``no programmatic or economic justification for closing down
    the LANL tritium R&D facility and reestablishing the capabilities at
    the Savannah River tritium site.''
        It is my understanding that the NNSA's Navy and Air Force customers
    are not convinced this transfer makes sense and find no justification
    for the move.
        Also, General Smolen, who was your deputy at the NNSA, recently
    stated in the press that ``There's really not any huge cost savings one
    way or another.'' He went on to say that the reason behind the decision
    was related to work-load leveling.
        As you are undoubtedly aware, the Senate included language in the
    supplemental stopping the transfer until an independent analysis can be
    performed of this decision and we can better understand the NNSA's
    rationale for this costly and unjustified decision.
        What was the rationale for the NNSA ignoring the TechSource study
    recommendation which advised against moving the tritium missions?
        Answer. We do not believe the TechSource study advised against
    moving the tritium missions as much as it stated that such a move
    should have a programmatic or economic justification, considering the
    importance of the GTS mission. The TechSource study provided useful
    recommendations for mitigating risks during the transition, and these
    have been incorporated into our implementation planning.
        Question. Do you support General Smolen's argument that work-load
    leveling was the rationale for this decision?
        Answer. Work-load leveling may be a benefit of this transition,
    however there are two other significant benefits. The first has to do
    with the potential for Sandia to provide a more integrated system
    architecture, incorporating GTS into the other non-nuclear subsystems.
    The second is that, as time goes on, it may no longer be possible to
    maintain a critical mass of technology staffs at multiple locations.
    While it may be possible to support two design agencies today, and to
    support two R&D centers that load and handle bulk quantities of
    tritium, we anticipate that future downsizing of the enterprise will
    force us to choose to have only one DA and one tritium R&D center of
    excellence. It seems prudent to plan ahead for this eventuality rather
    than to cope with it after the opportune time for transition has past.
    With the Savannah River Site having been established as the Tritium
    Center of Excellence, closer coordination of the R&D enterprise with
    the production facility is expected to be an advantageous initiative.
        Question. Will the tritium GTS mission be impacted by the Nuclear
    Posture Review?
        Answer. The likely outcome of the NPR is expected to lend further
    support to the GTS transition decision. Projected future workloads do
    not support keeping highly specialized technical expertise at multiple
    sites, and more leveraging of talent will be required to support system
    needs. The mechanical and materials knowledge will need to be applied
    across multiple component sets. As the NPR relates to stockpile size,
    our expectation is that the GTS DA and tritium R&D missions and
    workloads will not be significantly affected. Considering the range of
    probable recommendations, we will still need to support GTS
    technologies that are currently deployed, and to make further
    improvements to the reliability, safety, and surety of GTS units in the
    future. Reductions in the quantities of systems deployed or developed
    will not result in proportional reductions in the need for GTS field
    support or development but may constrain the resource base available to
    support these missions.
        Question. Dr. Seymour Sack sent a letter to Mr. D'Agostino on Feb
    8, 2008 to which a response was sent. Can you please forward a copy of
    Dr. Sack's letter regarding transfer of the tritium gas transfer system
    to my office or the Senate Security Office if it is classified?
        Answer. Yes. We did receive Dr. Sack's letter addressing his
    concerns with our decision process. We will provide a copy of Dr.
    Sack's letter as well as our response.

         DOES THIS ADMINISTRATION SUPPORT IMPROVED WEAPONS USE-DENIAL
                                  STRATEGIES?

        Question. Given the importance of the B61 to sustaining a safe,
    secure and reliable nuclear deterrent for the United States and its
    allies, the NNSA has made a decision to proceed with the B61 Life
    Extension Program. I have two concerns with your budget request. The
    first, it fails to provide sufficient funding to support a full
    feasibility study of both nuclear and non-nuclear parts as requested by
    the Air Force. Second, it fails to evaluate the option to integrate
    state-of-the-art use control devices. I believe it is important that
    the weapons we do retain have the best safety and security features
    built into them.
        Does the administration support adding more state-of-the-art safety
    and security features to our nuclear weapons systems like the B61?
        Answer. NNSA is committed to improving the surety (safety, security
    and use control) of the nuclear weapons stockpile at each insertion
    opportunity. This commitment meets the national imperative to ensure an
    adversary, either a nation or terrorist, never obtains a functional
    U.S. nuclear weapon. U.S. Presidents have consistently articulated this
    imperative through directive or policy such the National Security
    Presidential Directive 28 and more recently articulated by our
    President in the speech he delivered in Prague, April 2009.
        As directed by the Nuclear Weapons Council, the Phase 6.2 life
    extension study for the B61 Mods 3, 4, 7, and 10 bombs began in
    September 2008, and we are evaluating, within existing funding
    constraints, the inclusion of state-of-the-art surety features in both
    the non-nuclear and nuclear systems during the study.
        Question. How much more would it cost to expand the feasibility
    study to include adding safety and surety features to the physics
    package?
        Answer. The NWC has directed a study including improving surety of
    the nuclear explosive package (NEP). NNSA estimates that an additional
    $30 million in fiscal year 2010 would be needed to fully support the
    addition of the nuclear scope to the study. This includes the study of
    options to add improved safety, security and use control to the NEP.
    This additional scope and resources are needed to complete the
    feasibility study in fiscal year 2010 and align the program to achieve
    a first production unit by 2017. Alignment between the NNSA and DOD is
    essential to providing the needed capability.
        Question. Since this is an Air Force weapon, can you tell me what
    their preference would be regarding the expansion of this study to
    include the physics package?
        Answer. During an April 2009 senior-level review, the Air Force and
    other DOD representatives made it clear that it is a priority for NNSA
    to include the NEP in the B61 life extension study. In addition, senior
    Air Force officials have communicated with the Secretary of Energy, the
    NNSA Administrator, and congressional staff their strong endorsement of
    adding enhanced safety and security features within the nuclear
    explosive package.

                               ADVANCED COMPUTING

        Question. Supercomputing is another success of Stockpile
    Stewardship. You have the fastest computer in the world, and NNSA has
    achieved modeling and simulation capabilities that many thought
    impossible.
        The Defense Science Board conducted a study of the Advanced
    Computing program and was very complimentary of the achievements in
    this program to develop a predictive and simulation capability and
    drive innovation in the advanced computing architecture.
        The Defense Science Board study concluded that the existing budgets
    are inadequate to achieve the milestones established by the NNSA.
        Can you please provide the subcommittee with a list of the current
    milestones and the status of each and what impact the budget request
    will have on each milestone?
        Answer. Computer simulation underpins our ability to certify
    weapons in the absence of testing, as well as meet our broad national
    security responsibilities. ASC planning is based in part on the urgency
    of developing predictive tools while experts still reside in the
    complex. The ``milestones'' in the ASC Roadmap (2006) to which the
    Defense Science Board (DSB) report refers are actually stretch goals
    along the pathway set forth in four focus areas necessary to meet
    national security simulation needs. These target goals include, for
    example, developing science-based replacements for (ad hoc models)
    Knobs #1-4 in the 2009-2016 timeframe, attaining a 100x petascale
    computing capability in 2016, an exascale computing capability in 2018,
    and a 50 percent improvement in setup-to-solution time for significant
    finding investigation (SFI) simulations. The knob-removal goals are key
    stockpile stewardship objectives and have been incorporated into the
    Predictive Capability Framework (PCF) that integrates activities of the
    NNSA simulation, science and engineering campaigns. The target date for
    achieving these stretch goals may change depending on funding or as
    more insight is gained about the problems.
        The NNSA has decided to keep the 2010 budget for science level with
    2009 pending outcome from the Quadrennial Defense Review (QDR) and the
    Nuclear Posture Review (NPR). To some degree, the declining funding
    that the DSB reviewed has been stemmed. However, their question about
    how the ASC program intends to meet roadmap stretch goals in a timely
    fashion, such as achieving exascale computing by 2018 to support
    stockpile stewardship, remains a legitimate concern.
        Question. What is your plan for developing the next generation of
    computers and how is this effort specifically being coordinated with
    the Office of Science?
        Answer. There has been an ongoing R&D partnership between ASC and
    DOE Office of Science's Argonne National Laboratory (ANL) to develop
    advanced supercomputers based on the BlueGene P/Q architecture.
    However, this level of collaboration and associated funding will not
    achieve exascale computing. Developing the next generation of
    (exascale) computers will be a significant challenge, more difficult
    than the first effort under ASCI to develop a 100 teraFlop
    computational capability. Machines at the exascale will require
    radically new ways of thinking about computer architectures and ways to
    program applications.
        We recognize that this is a challenge beyond the scope of ASC alone
    within current funding projections, and that it will require a
    Government-wide solution. To this end we have taken the first steps to
    establish a collaboration with the Office of Science to make exascale
    computing a reality. This joint collaboration was announced at the June
    2009 Scientific Discovery through Advanced Computing (SciDAC)
    Conference in San Diego, CA, and a steering group has been formed. The
    first task for the steering group is to report to the ASCR and ASC
    programs the scope of what needs to be done to achieve exascale
    computing. Once identified, the scope could require focused investments
    for a period of time to be successful. The programs' intent is to work
    together through shared investments towards a common goal of achieving
    exascale computing by the end of the next decade.
        Question. And, what is your plan for ensuring that the
    sophisticated computer codes and models that you have in place now will
    be able to be run on these new generations of supercomputers?
        Answer. Generally, our modern-multiphysics codes are continuously
    updated. Portions of the codes that can best take advantage of the new
    architectures are modified to do so. Writing code can take years to
    achieve, and must be well planned and synchronized with evolving
    technologies. Consequently, ASC must be intimately involved with the
    technology frontier. Our approach ensures that the power of the
    supercomputers is available to users of the existing code base; it
    provides a reliable but very modest improvement in code and model
    performance. By adopting this incremental approach, risk that our codes
    and models will not be available is minimized.
        This approach will likely not be sufficient as we approach exascale
    computing. But, at this time it is premature to project what will be
    needed to move our codes to an, as yet, unknown architecture. Our
    planning will be synchronized with architectural designs as they
    mature. At that time we will make the traditional trade-offs between
    advancing the current codes, freezing development until transitioning
    is complete, or accelerating the transition by expanding the work
    scope. While we generally have not had to rely on expanding work scope
    in the recent past, this scenario is more likely as we approach
    exascale, which will dictate the need for additional funding for a
    limited term initiative in future years.
        Question. Can you please provide the subcommittee with a project
    data sheet on for the Zia and Sequoia machines, including cost,
    schedule, and mission justification?

                                  PART 1--ZIA

        Answer. The DOE NNSA ASC Program requires a production capability
    computing system in 2010 to run extensive, high-fidelity integral
    calculations of high-priority applications within the Complex to
    support the national Stockpile Stewardship Program. The Zia capability
    system will replace the ASC Purple system for existing simulation codes
    as the next national user facility for computing across the tri-labs.
    This system will provide a capability class resource to the ASC
    simulation community for the 2010-2015 timeframe.
        Zia has a 3-year schedule, with delivery of the platform scheduled
    for Q3 fiscal year 2010 and assume the national user facility workload
    by the beginning of fiscal year 2011. The funding profile for Zia is as
    follows: fiscal year 2008--$0; fiscal year 2009--$15 million in budget,
    $0 spent with project at CD-1; fiscal year 2010--$42.36 million; fiscal
    year 2011--$14.6 million.

                                PART 2--SEQUOIA

        The Sequoia mission need is to run both high-fidelity science
    calculations and three-dimensional uncertainty quantification (UQ)
    calculations. In addition, Sequoia is an advanced architecture system
    that will push the state of the art on the road to exascale computing.
    It will provide the processing power necessary to run the most resolved
    calculations required by the weapons codes as they will exist between
    2011 and 2016.
        The scope of this project covers acquisition of Sequoia
    computational resources and related I/O infrastructure, platform vendor
    build contract, platform vendor development and engineering (D&E)
    contract, and an I/O infrastructure D&E contract. In addition to the
    2011 system delivery, the Sequoia contract will provide a smaller, but
    significant, initial delivery (ID) environment beginning in 2008 to
    permit the necessary scaling and code development to ensure effective
    use of the final platform.
        Sequoia has an extended 5-year schedule, with delivery of the final
    system scheduled for Q1 fiscal year 2012. The Future Years Nuclear
    Security Plan (FYNSP) funding profile for Sequoia is as follows: fiscal
    year 2008--$15 million; fiscal year 2009--$54 million in budget, $42
    million spent; fiscal year 2010--$14.5 million; fiscal year 2011--$38.7
    million; fiscal year 2012--$51.8 million; fiscal year 2013--$43.0
    million.

         CUT TO NONPROLIFERATION AND DETECTION RESEARCH AND DEVELOPMENT

        Question. Mr. D'Agostino, the budget request cuts the nuclear
    detection R&D budget by $66 million. This funding is critical to
    maintaining the technological advances to detect and monitor
    clandestine nuclear program or to catch smuggling of nuclear materials.
    In light of the activities in North Korea and Iran, it seems this
    funding reduction should be reconsidered.
        What is the rationale for this reduction?
        The apparent ``reduction'' of $66 million comes from comparing the
    fiscal year 2010 budget request with a fiscal year 2009 appropriation
    that was significantly higher than the fiscal year 2009 budget request.
    The administration's fiscal year 2010 budget request is greater than
    the fiscal year 2009 request.
        Question. Recent reports, including the Strategic Posture Review
    and the Council of Foreign Policy, recommended increased funding for
    forensic research and attribution. Can you please describe how this
    program is investing in our forensic and attribution capabilities and
    what long term investments in NNSA facilities aside from the 300 Area
    at PNNL where this program is building our capabilities?
        Answer. NNSA investments include purchase of specific scientific
    instrumentation for the NNSA laboratories to advance research in post-
    detonation forensics analytical methods (some examples include: laser
    fluorination isotope ratio mass spectrometer (LLNL); Cameca secondary
    ion mass spectrometer (SIMS-LANL); Los Alamos Sferic array (measures
    ground EMP)). In addition to these activities funded by the NN R&D
    program, NNSA funds national technical nuclear forensics work through
    the Nuclear Counterterrorism and Incident Response program at about $10
    million annually.
        Question. NNSA facilities provide significant and varied research
    and discovery capabilities for different users and mission need. Each
    of these facilities is costly to maintain and staff. Can you please
    tell the subcommittee how much of the annual Nonproliferation and
    Detection R&D budget contributes to operations funding at our national
    labs in both real dollar amount and as a percentage of facility
    operations.
        Answer. NNSA's Defense Nuclear Nonproliferation (DNN), Office of
    Nonproliferation and Verification R&D funding is presented as a
    percentage of estimated overall NNSA fiscal year 2009 funding to the
    listed DOE/NNSA labs. The following table is provided.

               FISCAL YEAR 2009 APPROPRIATIONS--ALLOCATED BY SITE
                          [Estimates in whole dollars]
    ------------------------------------------------------------------------
                                            Nonproliferation    Percent of
               Reporting Entity             and Verification     NNSA Site
                                                   R&D            Funding
    ------------------------------------------------------------------------
    Ames National Laboratory..............         $236,000           100.0
    Argonne National Laboratory...........        3,275,000             6.8
    Brookhaven Science Association (BNL)..        2,171,000             5.1
    BWXT Pantex...........................           35,000            <0.01
    BWXT Y-12.............................        2,226,000             0.3
    NNSA-HQ (including SBIR)..............       11,043,129            13.2
    Idaho National Lab....................        4,595,000             2.3
    Kansas City Plant.....................           35,000            <0.01
    Lawrence Berkley National Lab.........        5,376,000            94.9
    Lawrence Livermore National Lab.......       43,184,671             4.2
    Los Alamos National Lab...............       88,231,445             6.0
    NNSA-Service Center (incl. University        16,622,605             1.9
     grants)..............................
    NSTech................................       10,538,000             3.9
    Oak Ridge National Lab................       25,306,746            18.6
    Pacific North West Lab................       42,257,800            19.5
    PNSO/PNNL Construction................       18,460,000            98.8
    Sandia National Lab...................       73,144,604             6.7
    Savannah River Nuclear Solutions......       17,054,000             6.2
                                           ---------------------------------
          TOTALS..........................      363,792,000             4.9
    ------------------------------------------------------------------------

        Question. What are the long term technology challenges this program
    is working to solve and what are the top research priorities in this
    budget?
        Answer. The top research priorities in this budget are divided into
    two areas. Roughly 60 percent of the budget will focus on developing
    technologies and methods to detect foreign uranium-235 production
    activities, plutonium production activities, special nuclear material
    movement and on developing Global Nuclear Safeguards technologies. The
    other 40 percent of the budget will focus on improving the Nation's
    ability to detect nuclear detonations by building the Nation's
    operational treaty monitoring space sensors, developing the regional
    geophysical capabilities to enable the Nation's ground-based treaty
    monitoring networks, and advancing technology in post-detonation
    nuclear forensics.

                       HIGHLY ENRICHED URANIUM IN RUSSIA

        Question. Mr. D'Agostino, your testimony and pronouncements of the
    administration have clearly made nonproliferation a top priority
    including the goal of minimizing the use of highly-enriched uranium in
    the civilian nuclear sector. I am supportive of those goals, although I
    am concerned about the vast amount of undeclared reserves of Highly
    Enriched Uranium (HEU) held by Russia, which is outside of the scope of
    the existing program.
        Reports vary, but it is quite possible that Russian HEU stockpiles
    make up the largest inventory of weapon-usable material held in the
    world today.
        When President Obama travels to Russia this July to sign the
    Plutonium Material and Disposition Agreement, will he press Russian
    President Medvedev to declare the size and makeup of the Russian HEU
    reserves and press for additional down blending of that material,
    whether it is used in Russia or sold internationally?
        Answer. Nonproliferation, and specifically, eliminating stocks of
    excess fissile material are key priorities of this administration.
    Coming to agreement on the terms of the Plutonium Management and
    Disposition Agreement is one important step in this effort. The
    President also has committed to seek further weapons reductions under a
    START Follow-On Treaty and to open negotiations for a Fissile Material
    Cut-off Treaty. Given the critical success of the DOE/NNSA HEU
    Transparency Program over the past 15 years to verify the disposition
    of over 368 metric tons of the planned 500 metric tons of Russian HEU,
    we would welcome the possibility of down blending additional excess
    Russian HEU. This HEU Transparency effort has been one of our most
    successful bilateral nonproliferation efforts with Russia yet in the
    area of tangibly eliminating weapons-derived material. However, to date
    the Russians have been unwilling to consider an extension beyond the
    2013 end date of this program. DOE/NNSA would certainly welcome the
    continuation of this important effort if Russia declares additional
    amounts of excess HEU beyond the initial 500 metric tons in the HEU
    Agreement.
        Question. Your budget proposes additional investment to secure
    weapons-grade material in Russia. Wouldn't you prefer that this
    material be down blended to eliminate any further threats?
        Answer. We would prefer that excess material be downblended; we are
    already working with the Russians to downblend HEU under the Material
    Consolidation and Conversion project that is not of weapons origin and
    that has been declared excess by the Russians. We think this activity
    would be a way to help Russia eliminate the risks associated with this
    and all nuclear material, as well as avoid the associated long-term
    security costs. However, some Russian sites require weapons-useable HEU
    for their operations. In those cases, our joint intent is to protect
    the material as well as possible. Central storage facilities with
    modern security systems are a good way to improve material security.

                                 CYBER SECURITY

        Question. Mr. D'Agostino, I find it curious that the DOE Office of
    Electricity Transmission Delivery and Reliability received $50 million
    in additional funding for cyber security research and development, yet
    the NNSA, which has seen a tremendous increase in cyber attacks of the
    past years, and recently in the last several months, received no
    additional funding increases.
        How do you explain this funding disparity?
        Answer. Funding for all programs within DOE, to include NNSA is
    determined by the Secretary of Energy through a very prescriptive
    process. NNSA's cyber security requirements are first presented by the
    NNSA CIO to the NNSA Administrator. The Administrator, after
    determining the highest priority needs for NNSA, makes the final
    recommendation to the Secretary who makes the final corporate decision.
        Question. Are you confident that the NNSA has adequate cyber
    protections in place to protect our national security secrets?
        Answer. The threats to the national security information and
    classified system within the NNSA computing environment are constantly
    changing and represent risks to our operations. However with the
    technology enhancement (i.e. EnCase Enterprise) and process
    improvements (NNSA Policy (NAP)) NNSA have invested in over past 2
    years, I believe that we have minimized the threats to the NNSA
    computing environment and national security information and are
    operating at an acceptable level of risk. NNSA's cyber security systems
    have benefited by external independent oversight programs, such as HSS,
    with activities such as network penetration testing and reviews of
    security plans and strategies. The Department and NNSA senior
    leadership will continue to monitor the threats to our computing assets
    along with the accompanying risks in order to make necessary changes
    and provide an appropriate level of protection.

                                    SECURITY

        Question. Mr. D'Agostino, several NNSA sites have suggested that
    funding of safeguards and security is inadequate to support the
    mission. Do you have any security concerns with any NNSA site or do you
    believe any of the NNSA sites lack sufficient funding?
        Answer. The fiscal year 2010 budget request is adequate to support
    the core security mission and maintain the program within acceptable
    risk levels. At the request level, NNSA sites will be able to sustain
    the security baseline program and support NNSA Enterprise-wide efforts
    to consolidate high-security assets and reduce the overall security
    footprint. In fiscal year 2010, the NNSA security program will focus on
    improving the effectiveness and efficiency of security operations
    through standardization and consistency of security program
    implementation, and upgrades to the security systems infrastructure so
    as to enable the sites to maintain performance of the security mission
    at the same or reduced funding levels in the out-years. To this end, we
    are investing in improved performance assurance programs at each site,
    with emphasis on Federal manager oversight, and have undertaken a new
    initiative (Zero-Based Security Review) with the objectives of
    establishing clear performance expectations, and issuing consistent
    policy implementing guidance. NNSA sites are, and must remain, among
    the most well-protected facilities in the world.

                                 NAVAL REACTORS

        Question. Mr. D'Agostino, your budget proposes to move forward on
    an Ohio Class submarine replacement. At the same time, you have frozen
    progress on CMR-R and UPF and other facilities pending the outcome of
    the NPR.
        Why not wait on the new submarine platform until the NPR is
    complete?
        Answer. The President has reaffirmed the need to maintain a strong
    deterrent for the foreseeable future. To ensure there is no gap in
    strategic coverage when the OHIO Class SSBNs begin to retire in 2027,
    we need to start concept design studies for the OHIO Class Replacement
    in fiscal year 2010. There are key technical and schedule drivers that
    require the fiscal year 2010 start so design and technology can mature
    to support a fiscal year 2019 ship construction schedule. Early design
    studies answer questions that will arise from the NPR deliberations.
    The design parameters under consideration are aimed at accommodating
    any conceivable conclusion of the NPR. The NPR will not determine the
    design of the submarine, but rather the number of weapons and targets.
    A reduction in weapons may result in fewer missile tubes per submarine;
    however, the total number of submarines is primarily derived from the
    number required at sea at any given time to provide a survivable
    deterrent in the regions we need to cover.
        Question. How is this investment different than that of a one-of-a-
    kind facility such as CMR-R and UPF, both of which are necessary in
    order to maintain the deterrent?
        Answer. There are more investment similarities than differences
    between the Ohio Class Replacement project and the CMR-R and UPF
    projects required to modernize the NNSA nuclear infrastructure. All are
    needed to sustain essential capabilities for the long-term and the
    details of NPR conclusions will not have significant impact on early
    design activities. Early design work is needed for all three in order
    to most efficiently plan for sustaining capabilities. The investment in
    the OHIO Class Replacement project differs from that in the CMR-R and
    UPF projects only in the maturity of its design. While the OHIO Class
    Replacement project will be starting its conceptual design in fiscal
    year 2010, the CMR-R and UPF projects are both currently in latter
    stages of preliminary design. The previous answer pointed out how OHIO
    Class Replacement design at its current maturity is independent of the
    NPR's conclusions. Although more mature, the designs of both the CMR-R
    and UPF projects are primarily driven by the need to maintain essential
    capabilities that are expected to provide an adequate capacity merely
    by the existence of the capability. Thus, CMR-R and UPF sizes and
    capacities are independent of the NPR's conclusions at expected future
    stockpile size ranges.

                               PENSION SHORTFALLS

        Question. Mr. D'Agostino, The stock market down turn over the past
    year has significantly reduced the DOE contractor pension value. In
    order to make up the shortfall, contractors are required to adjust
    their program charges (known as the indirect rate). According to
    figures prepared by the Department, the average total contributions
    paid to DOE contractor pension plans from 2003 to 2008 was $330
    million. In the future, DOE expects to pay on average $1.5 billion per
    year over the next 5 years. The peak contribution years are estimated
    to come in 2012 and 2013 at just under $2 billion per year. The lion
    share of the contributions coming from NNSA and Environmental Cleanup
    sites.
        Based on this 2010 budget request, it appears that the NNSA is
    facing a pension shortfall of $411 million, of which $200 million was
    not budgeted for and will further reduce mission funding. It is my
    understanding that NNSA plans to deduct most of the savings out of the
    operating budget and delay facility closures and preventative
    maintenance and the consolidation of special nuclear materials.
        This trend is simply unsustainable and will have a devastating
    impact on the weapons and nonproliferation program. Has the Department
    considered the program impacts on to scientific research, operations
    and employment levels? What actions are being taken to mitigate this
    problem over the next 5 years?
        Answer. Because the pension payments for the Defined Benefit plans
    are a function of economic conditions, the number of retirees to
    receive benefits, and largely address legacy promises of benefits, we
    are very limited in what we can do now to mitigate the problem
    indicated by the analysis. Except for a few collective bargaining unit
    Plans, the NNSA M&O contractors have closed their defined benefit
    programs to new entrants in favor of defined contributions (401K) type
    of retirement plans. As a result, there is little to be done to reduce
    costs in the DB arena, instead NNSA and its M&O contractors are seeking
    ways to better address future payments.
        The pension plans of DOE's M&O contractors have suffered losses in
    asset value similar to those in the private sector as a result of the
    business downtown in the past 12 months. Overall, their plans are in
    relatively good shape compared to the rest of industry, however, the
    recession coupled with new Pension Protection Act requirements has
    resulted in funding shortfalls for some of plans.
        Additionally, our M&O contractors continue to experience
    fluctuations in pension liabilities, and the increased liabilities
    coupled with the decrease in Plan assets has resulted in a significant
    increase in the required contributions to pension plans at some of our
    sites. NNSA is monitoring the situation to understand the projected
    shortfalls, and to mitigate the resulting impact on all of our mission
    program activities, operations and employment levels. NNSA will
    exercise all flexibility available during budget execution to manage
    site and program impacts by incentivizing operating efficiencies at the
    M&O contractors, by reallocating available funding to affected
    contractors through reprogramming of remainder funding from completed
    projects and programs; and by deferring or canceling lower priority
    activities. However, the current projections for 2011 through 2013 of
    about $1 billion shortfall annually in budgeted dollars, which are
    likely to be required to reimburse our laboratory and plant contractors
    for their payments to defined benefit pension plans, are beyond the
    ability of the NNSA to handle through increased efficiencies and
    limited reprogramming from remainders in project funding. If economic
    improvements do not materialize to mitigate these cost increases, NNSA
    may well be required to drastically cut back, and in some cases
    abandon, planned activities at our Sites resulting in the potential for
    significant workforce restructurings.
                                     ______

                 Questions Submitted by Senator Lamar Alexander

        Question. The President's budget request shows no construction
    funding for the Uranium Processing Facility (UPF) until 2013 which puts
    the project 3-4 years behind schedule.
        If UPF is delayed beyond its currently planned operational date of
    2018, is it reasonable to assume that the Y-12 enriched uranium
    facilities can remain safe and reliable beyond 2018?
        Answer. The President's budget request included $54,478,000 for
    Project Engineering and Design of UPF in order to advance the project`s
    design, in accordance with the requirements of DOE Order 413.3A. NNSA
    will take the steps necessary to maintain the Y-12 enriched uranium
    facilities safe and reliable until UPF becomes operational. Concrete
    measures are being taken to reduce risk at Y-12. For instance, the
    Nuclear Facility Risk Reduction Project, a multi-year effort funding
    maintenance and limited improvements, will address the safety and
    reliability of uranium facilities until UPF can be built to replace
    those facilities. While sufficient capacity exists today, the risk of
    extended shutdown is unacceptably high and safety of operations remains
    a major concern. The Uranium Processing Facility (UPF) must be built to
    alleviate the risk of shutdown, reduce costs, and provide a safe
    working environment for our nuclear security workers. Construction of
    this facility is mission critical and will take at least 7 years to
    complete. Each year NNSA is required to take measures to mitigate the
    growing risks is another year longer the Nation runs the risk of losing
    its uranium processing capability, with a commensurate impact on its
    nuclear deterrent and its ability to supply the Navy with fuel.
        Question. How long would it take for the UPF to pay for itself in
    reduced annual costs?
        Answer. Based on the current preliminary project estimates, UPF's
    payback period is approximately 10 to 15 years. The UPF project's
    contribution to safety of the Y-12 site and of the public is, however,
    the overriding justification of the project--even if the actual payback
    period is found to be longer, it would not have been acceptable to
    continue operations in the current facilities.
        Question. What is the condition of Building 9212, where the uranium
    enrichment work currently takes place? Is this facility viable for
    long-term enriched uranium mission capability?
        Answer. Building 9212 is not suitable for performing long-term
    enriched uranium services. The enriched uranium services need to be
    transferred to a facility that can support long-term sustainability and
    meet modern industrial and nuclear safety standards. The enriched
    uranium services are being conducted in Building 9212, pending
    availability of UPF. NNSA will take the steps necessary to maintain the
    Y-12 enriched uranium facilities safe and reliable until UPF becomes
    operational. Our current uranium infrastructure is obsolete, costly,
    and decrepit. The risk of extended shutdown is unacceptably high, and
    worker safety continues to be a major concern.
        Question. If there were no new nuclear weapons production or life
    extension, would UPF still be needed?
        Answer. Yes, UPF sustains capabilities that are needed as long as
    the Nation has an inventory of HEU. UPF is essential to dismantling
    weapons to support arms controls initiatives, supporting the Naval
    Nuclear Reactors Program, for down-blending excess enriched uranium for
    non-proliferation purposes, and ultimately for power and research
    reactors (i.e., Accelerator Test Facility and High Flux Isotope
    Reactor). UPF is needed to support all stockpile activities involving
    the processing of Highly Enriched Uranium (HEU), including the
    surveillance and dismantlement programs. Many studies conducted on the
    UPF design, including the recently issued Dr. Everet Beckner/TechSource
    Study, concluded that approximately 75 percent of the UPF is required
    even if no new weapon is ever built and noted that continued operations
    of the current facilities at Y-12 past 2020, in particular the 9212
    building, would require accepting an appreciably increased safety risk.
        Question. Who has reviewed the capabilities and size of the UPF
    facility?
        Answer. The capabilities and size of UPF have been assessed both
    internal and external to NNSA over the past few years. First, the Y-12
    project team and NNSA Headquarters led a review of UPF that included
    subject matter experts from across the nuclear security enterprise,
    including the national laboratories. Second, NNSA conducted a joint
    review of UPF with technical assistance provided by the United
    Kingdom's Aldermaston Weapons Establishment. Third and most recently,
    NNSA chartered an independent external review committee headed up by
    former Deputy Administrator for Defense Programs, Dr. Everet Beckner.
    As stated by Dr. Beckner in his team's final report: ``Based upon our
    review, as will be demonstrated in the following report, I am now
    convinced that given the requirements as defined, a substantial change
    of size of the facility is not warranted at this time and the project
    should move forward without further delay.''
        Question. Can the enriched uranium mission be performed anywhere
    other than Y-12?
        Answer. No, the uranium enrichment mission can not be accomplished
    at other sites without additional funding. UPF (and the facilities it
    replaces) are part of an integrated manufacturing operation that
    includes the soon-to-be-completed Highly Enriched Uranium Manufacturing
    Facility (HEUMF) and the non-nuclear operations of the Y-12 site. It is
    possible for portions of the enriched uranium mission to be met in new
    facilities at two alternative sites, the Savannah River Site (down-
    blending, sweetening, reuse of material) and the Pantex Plant
    (surveillance, disassembly), but with differing schedules, costs, and
    risk levels, and with the replication at some level of the capabilities
    of other parts of Y-12's integrated operation. An Integrated Project
    Team (IPT) conducted an analysis evaluating these alternative sites and
    produced a report on Uranium Mission Transformation in July 2008. As
    part of this effort, NNSA asked the Office of the Secretary of Defense
    (OSD) Cost Analysis Investment Group (CAIG) to act as an independent
    advisor to the IPT for this comparative business case analysis. The
    total operations and transportation costs were lower for Y-12 than the
    other alternatives. A new, fully trained, and qualified workforce would
    also have to be established if the mission were to be performed
    elsewhere. Overall, the comparative risk and costs are lower for Y-12
    than the alternative sites considered. The IPT concluded that the
    uranium mission should be retained at Y-12.
        Question. Your office has been studying how best to compete the
    NNSA production contracts (Y-12, Pantex, and Kansas City Plant) that
    are expiring next year. Recently your spokesman indicated the NNSA
    leadership would review the work of the team, who provided analysis for
    this decision, over the coming months. Given you are in the window
    where a decision needs to be made soon if new contracts are to be put
    in place, can you be more specific on schedule for this action.
        Answer. The acquisition strategy is in the final review process and
    we expect a decision in the near future. The extend/compete decisions
    will require Secretarial approval.

                              SUBCOMMITTEE RECESS

        Senator Dorgan. This hearing is recessed.
        [Whereupon, at 11:08 a.m., Tuesday, June 2, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2010

                                  ----------

                            THURSDAY, JUNE 18, 2009

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:59 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Byron L. Dorgan (chairman)
    presiding.
        Present: Senators Dorgan, Tester, Bennett, Cochran, Bond,
    and Alexander.

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

    STATEMENT OF TERRENCE C. SALT, ACTING ASSISTANT
                SECRETARY OF THE ARMY

                  OPENING STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. I'm going to call the meeting to order.
    This is the subcommittee of the Appropriations Committee of the
    United States Senate, Subcommittee on Energy and Water. Today
    we're going to take testimony on the fiscal year 2010 budget
    request for the U.S. Army Corps of Engineers and the Department
    of the Interior.
        Testifying for the Corps will be Terrence Salt, Acting
    Assistant Secretary of the Army for Civil Works. Mr. Salt,
    congratulations on your appointment as Principal Deputy and
    your current assignment as Acting Assistant Secretary. I look
    forward to working with you and Ms. Darcy once she is confirmed
    on the many water resource problems that we face.
        I know that you will familiarize yourself especially with
    North Dakota water issues and know something about some of them
    already, perhaps Mississippi issues as well. But those of us
    who serve on this subcommittee have an abiding interest in
    these matters.
        Lieutenant General Van Antwerp, Chief of the Engineers for
    the U.S. Army Corps of Engineers, it's always good to see you
    and welcome. We appreciate your being here.
        Testifying for the Department of the Interior will be
    Deanna Archuleta, the Acting Assistant Secretary for Water and
    Science at the Department. Welcome to you. Congratulations,
    too, on your appointment as the Deputy Assistant Secretary for
    Water and Science and on your current assignment as the Acting
    Assistant Secretary for Water and Science. I look forward to
    working with you and Ms. Castle once she is confirmed on many
    of the western water issues.
        Michael Connor, Commissioner of the Bureau of Reclamation.
    Commissioner Connor, congratulations on your recent
    confirmation. We appreciate your being here and I know that
    you're aware I'm passionate about the issues concerning rural
    water supply, especially on the unmet promises for now nearly
    five decades in North Dakota when they built the Garrison Dam,
    and I know you'll be more familiar with those projects as well
    and perhaps already are.
        The task of talking about the Corps budget is difficult
    because we've only had the details available for about a week.
    I'm talking about the detailed budget justifications.
    Justifications were released 5 weeks after the President
    released the budget to Congress, which has made it very
    difficult for us. Every other Federal agency got their budget
    justifications to Congress with the submission of the budget.
        I understand that some of that delay was beyond the control
    of the Corps, General. For instance, I understand the budget
    justifications were not cleared by OMB until May 29. That was 3
    weeks after the budget was released. So perhaps my real beef
    here is with the Office of Management and Budget. That would
    not be a new irritation for me.
        The Corps of Engineers did not get the budget
    justifications on the Internet until June 11, and printed
    copies were not furnished until June 12, to the extent that
    they were printed. So we've had staff working on these issues
    now, but it's been difficult.
        Mr. Salt, we postponed this hearing in May because those
    details weren't available, and I thought we might have to
    postpone a second time. But we're here finally at long last to
    talk about these various issues.
        This is the second time in 4 years that this has happened,
    so it's not about the administration. It's about particularly
    OMB and the tortured mechanics that these things go through.
        The President's fiscal year 2010 budget for the Corps of
    Engineers proposes $5.125 billion, which is $277 million below
    the fiscal year 2009 enacted of $5.402 billion. This is the
    narrowest gap that we've seen for a number of years between
    current enacted amount for fiscal year 2009 and the President's
    fiscal year 2010 budget.
        When you look at the budget details on an account by
    account basis, the difference really is considerably larger
    than that. General investigations is down $68 million from the
    current year. General construction is down $424 million from
    the current year, and this certainly doesn't help us reduce the
    more than $67 billion backlog in unconstructed projects.
        The Missouri River and tributaries is down $136 million
    from the current year.
        O&M is one of the bright spots in the Corps budget with an
    increase of about $300 million. O&M has been essentially flat
    for a number of years, even though personnel costs have
    continued to rise and the inventory of Corps projects has
    continued to age, increasing maintenance needs.
        In this case, the administration has not resorted to budget
    tricks, which we've seen in many previous years. I appreciate
    that. The O&M budget that I just described is in fact a true
    increase, not some mirage, and that will be helpful.
        To provide even this modest O&M increase and get the other
    major accounts to current levels would require an additional
    $600 million. Now, the two major projects for the Department of
    the Interior under this subcommittee are the Central Utah
    Project Completion Act and the Water and Related Resources for
    the Bureau of Reclamation. Your budgets, I would say to Ms.
    Archuleta and Mr. Connor, are relatively flat compared to
    fiscal year 2009.
        The Central Utah Project Completion account is proposed at
    the same amount as the current year, and the Bureau of
    Reclamation is down $55 million from the current year. A flat
    budget, of course, is a declining budget for your agencies.
    Personnel and contract costs continue to increase each year by
    some amount. So you're accomplishing less work when you propose
    a flat budget. Unfortunately, the needs for water and power in
    the West continue to rise.
        I'm very cognizant of the very serious deficit problems we
    face in our Government. I'm also aware, though, that some
    spending is just spending, while other spending is a really
    important investment which provides dividends for the future.
    Much of the investment we make in water projects and
    reclamation projects produce significant deficits and great
    assets for this country.
        So it's not escaped my notice that we really need to
    evaluate on a line by line basis what our needs are, what our
    responsibilities are, and what kinds of funding we will have
    available for them.
        I know that you come to us today as members of the
    administration, destined to support and required to support the
    budget that has been sent to us. In fact, only in recent years
    on one occasion have we had someone in a complete fit of candor
    and unbelievable truthfulness say: No, I'm sitting here at the
    table and the amount of money that's been requested is far
    short of what is really needed. We were staggered to hear that
    kind of testimony, and the next morning that person was fired.
        So my expectation is that you will pay fealty to the budget
    you're here to support today but you will hear from members of
    our subcommittee that in these areas of water projects and the
    Corps of Engineers' needs and responsibilities as well as the
    Bureau's responsibilities, that many of us have very
    significant and strong feelings about how to meet those
    obligations.
        I want to be able to get to you so that you can give us
    your statements, but I want to talk just for a moment about the
    American Recovery and Reinvestment Act. I was surprised that
    the request from the administration on an economic recovery act
    to try to lift the country's economy, which as you know was
    controversial--some voted for it, some didn't--included not one
    penny from the administration for either of your agencies. I
    was pretty surprised by that.
        It seems to me that if you're going to do something to
    substantially address infrastructure problems and put people
    back to work and have an asset when it's completed, one of the
    things you would look at would be water issues, water projects,
    and reclamation projects. But there wasn't any funding in the
    initial request.
        Senator Cochran and I and others included funding in this
    economic recovery package for water projects, then left it to
    your agencies to decide how the funding that we finally put
    together would be distributed. We believe we gave pretty clear
    guidance, without earmarking, how funding should be
    distributed, both in the legislation as well as in report
    language.
        But we have some concerns about how the distribution of
    that funding was developed behind closed doors. So we'll talk
    some about that today.
        Let me thank you for being here. I have other things I will
    put in the record that describe some of our interests and some
    of our concerns.
        Let me now call on my colleague from Mississippi, Senator
    Cochran, for any comments he wishes to make.

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, thank you. Thank you for
    convening this important hearing to review the administration's
    fiscal year 2010 budget request. I'm pleased to join you in
    welcoming this panel and to thank them for appearing here
    before the subcommittee today.
        The Corps of Engineers has a very large presence in my
    State. Flood control activities on the Mississippi and Yazoo
    Rivers, dredging of ports on the Mississippi River and in the
    gulf coast region, and environmental infrastructure projects
    are all very important activities that affect the economic
    future of our State and the physical survival of our citizens.
        I'm concerned that the budget we are reviewing today might
    not adequately address some of these most important needs. But
    I would like to take the opportunity to compliment the efforts
    of the Corps of Engineers, the Mississippi Coastal Improvements
    Program team, specifically in Mobile, Alabama, for completing
    the plan to implement hurricane mitigation projects and to
    restore Mississippi's barrier islands.
        The plan the team has provided is a much needed project
    that is essential to protect the vast natural resources as well
    as property of the State of Mississippi and its citizens and to
    help protect infrastructure and commerce along the Gulf of
    Mexico.
        General Van Antwerp, as the Chief of Engineers I know you
    understand it is your charge to verify the final version of
    this plan. It's my hope that you will be able to certify the
    proposal expeditiously after a careful review of its merits.
        I would also like to compliment the Engineer Research and
    Design Center of the Army Corps of Engineers. The research
    undertaken at this facility is of the highest importance to our
    Nation and our armed forces. Once again, the center was named
    the Army's top research laboratory, an honor that is often
    bestowed on the researchers and staff in Vicksburg,
    Mississippi. We are very proud of all of them.
        The Civil Works Division of the Army Corps of Engineers has
    a unique history. It's vital to our Nation's infrastructure
    protection and it's very important that we in Congress
    recognize both the importance of the work done by the Corps of
    Engineers and carefully review the costs and other challenges
    that these projects may face.
        We thank you again for your cooperation with this
    subcommittee and I look forward to your testimony.
        Senator Dorgan. Senator Cochran, thank you very much.
        I wanted to make one additional point before I recognize
    the witnesses, and that is the question of earmarks. I'm
    speaking explicitly about the President's request coming
    through the agencies of what it is you wish to have funded--
    your earmarks--and the metrics that you use to determine that,
    and the concern that many of us have how these things change
    year to year. The criteria for budgetable projects switch from
    one year to the next, depending on the administration, and even
    changes inside the same administration. For example, shifting
    views on shore protection projects, the way major
    rehabilitation projects and environmental compliance activities
    have bounced among various accounts, rural water projects are
    funded one year, next they are not funded, even the way the
    benefit-to-cost ratio is chosen to determine budgetable
    projects moves up and down on the list.
        Again, these are all earmarks chosen by someone, and
    ultimately the President. But someone in your agencies, through
    OMB, decides to earmark all this money and then send the
    earmarks to Congress and say: We've made these decisions about
    what our priorities are; that's how we've earmarked it; but we
    have our own metrics with which to make the decisions. We up
    here look at them and think: Well, why do those metrics change
    so much from one year to the next with shore protection or
    water projects and so on?
        We don't quite understand that, and we hope that we can
    begin a discussion with you about how you decide on what
    earmarks you request, what those metrics are, and whether those
    metrics can perhaps see the light of day so that we understand
    them a bit better.
        Well, let me thank all of you for being here and let me
    begin, Mr. Secretary, with your testimony. Terrence Salt,
    Acting Assistant Secretary of the Army for Civil Works, thank
    you for being with us.

                         STATEMENT OF TERRENCE C. SALT

        Mr. Salt. Sir, thank you, Chairman Dorgan, Senator Cochran.
    Thank you for the opportunity to present the President's budget
    for the Civil Works Program of the Army Corps of Engineers for
    fiscal year 2010. I will also briefly touch on the activities
    related to the stimulus bill.
        In developing this budget, we have sought to achieve four
    principal objectives: the first, to focus construction funds on
    those investments that provide the best return from a national
    perspective in achieving economic, environmental, and public
    safety objectives;
        Second, to support the safe and reliable operations and
    maintenance of key existing water resources infrastructure;
        Third, to improve Corps project planning and program
    performance;
        Finally, to advance aquatic ecosystem restoration efforts,
    including the restoration of Louisiana's coastal wetlands and
    Florida's Everglades.
        The budget provides funding for the development and
    restoration of the Nation's water and related resources within
    the three main Civil Works program areas. Sir, you mentioned
    the commercial navigation, flood and coastal storm damage
    reduction, and aquatic ecosystem restoration.
        Additionally, the budget supports hydropower, recreation,
    environmental stewardship, water supply services at existing
    water resource projects owned or operated by the Corps,
    protection of the Nation's regulated waters and wetlands, the
    cleanup of sites contaminated as a result of the Nation's early
    efforts to develop atomic weapons, and emergency preparedness
    and training.
        As you pointed out, the total discretionary funding of
    $5.125 billion in the fiscal year 2010 budget is our budget
    and, although it is less than was previously appropriated last
    year, it is the highest amount ever requested by the President
    for the Civil Works Program.
        The budget proposes enactment of legislation to authorize a
    lock usage fee which would, over time, replace the diesel fuel
    tax now paid by most commercial users of the inland and intra-
    coastal waterways. This proposed legislation will address the
    declining balance in the Inland Waterways Trust Fund. This
    affects the Government's ability to finance the non-Federal
    portion of Federal capital investment in these waterways and
    will do so in a way that improves economic efficiency compared
    to the existing fuel tax by more closely aligning the costs of
    those who use the Corps locks for commerce with the capital
    costs that the Corps incurs on their behalf.
        The administration stands ready to work with the Congress
    and stakeholders with interests in these capital investments to
    help pass and implement this proposal.
        The fiscal year 2010 budget continues the Civil Works
    Program's commitment to a performance-based approach to
    budgeting. The Army applied objective performance guidelines to
    focus construction funds on these investments within the three
    main mission areas of the Corps that provides the best return
    from a national perspective in achieving economic,
    environmental, and public safety objectives.
        Similarly, the Army used objective performance criteria to
    allocate O&M funds in the fiscal year 2010 budget. The O&M
    criteria consider both the condition of the project and the
    potential consequences for project performance if the O&M
    activity were not undertaken in fiscal year 2010.
        In fiscal year 2010, the court will focus efforts on
    developing new strategies along with other Federal agencies and
    non-Federal project partners, to better manage, protect, and
    restore the Nation's water and related land resources,
    including flood plains, flood-prone areas and related
    ecosystems.
        I'd like to speak for a minute about the recently enacted
    American Recovery and Reinvestment Act, which provided $4.6
    billion for the Corps' Civil Works Program. The Corps is
    managing these funds and successfully achieving the Recovery
    Act's stated purposes. Obligations and expenditures commenced
    in early May. Upon clearance of the Corps' project plans and
    lists, projects were selected based on the fundamental tenet of
    prudent management and investment in infrastructure and the
    ecosystem restoration projects that will provide long-term
    benefits for the Nation.
        The Civil Works allocations are fully consistent with the
    President's direction provided in his executive memorandum of
    March 20, 2009, ensuring responsible spending of Recovery Act
    funds. Moreover, the Civil Works allocations are consistent
    with additional project selection criteria provided in the
    conference committee report accompanying the act that projects,
    programs, or activities that are accomplished with Recovery Act
    dollars will be obligated and executed quickly, will result in
    high immediate employment, have little schedule risk, will be
    executed by contract or direct hire of temporary labor, and
    will complete a project phase, a project, an element, or will
    provide a useful service that does not require additional
    funding.
        Also, as stipulated in the Recovery Act, no funds will be
    used for any project that at the time of the obligation has not
    received appropriations provided for energy and water
    development--essentially no new starts.
        The wide geographic distribution of projects spreads the
    employment and other economic benefits across the United
    States. Funding is also distributed across Civil Works programs
    to provide the Nation with project benefits related to inland
    and coastal navigation, the environment, flood risk management,
    hydropower, recreation, and more.
        I'm pleased to report that as of the close of business June
    12, 2009, the Corps has obligated more than $320 million, work
    on the ground has begun, and real progress is being made.
        In conclusion, this administration has made rebuilding
    America's infrastructure a priority. Through resources provided
    for the Army Civil Works program in the President's budget for
    fiscal year 2010, as well as the resources provided through the
    stimulus bill, the Corps can help achieve this objective.

                               PREPARED STATEMENT

        Mr. Chairman, I am proud to support this budget for the
    Army's Civil Works program. I look forward to working with this
    subcommittee and to your support of the President's budget
    proposals, and I welcome any questions you may have.
        Thank you, sir.
        [The statement follows:]

                     Prepared Statement of Terrence C. Salt

        Chairman Dorgan, Senator Bennett, distinguished members of the
    subcommittee, thank you for the opportunity to present the President's
    budget for the Civil Works Program of the Army Corps of Engineers for
    fiscal year 2010.

                                    OVERVIEW

        In developing this budget, we sought to achieve four principal
    objectives:
      --Focus construction funds on those investments that provide the best
            return from a national perspective in achieving economic,
            environmental and public safety objectives;
      --Support the safe and reliable operation and maintenance of key
            existing water resources infrastructure;
      --Improve Corps project planning and program performance; and
      --Advance aquatic ecosystem restoration efforts, including
            restoration of Louisiana's coastal wetlands and Florida's
            Everglades.
        The budget provides funding for development and restoration of the
    Nation's water and related resources within the three main Civil Works
    program areas: commercial navigation, flood and coastal storm damage
    reduction, and aquatic ecosystem restoration. Additionally, the budget
    supports hydropower, recreation, environmental stewardship, and water
    supply services at existing water resources projects owned or operated
    by the Corps. Finally, the Budget provides for protection of the
    Nation's regulated waters and wetlands; cleanup of sites contaminated
    as a result of the Nation's early efforts to develop atomic weapons;
    and emergency preparedness and training. The budget does not fund work
    that should be the responsibility of non-Federal interests or other
    Federal agencies, such as wastewater treatment and municipal and
    industrial water treatment and distribution.

                 FISCAL YEAR 2010 DISCRETIONARY FUNDING PROGRAM

        The total discretionary funding of $5.125 billion in the fiscal
    year 2010 budget is the highest amount ever requested by the President
    for the Civil Works program.
        Within this total, $1.718 billion is budgeted for projects in the
    Construction account. The budget provides $2.504 billion for activities
    funded in the Operation and Maintenance (O&M) account.
        The fiscal year 2010 budget also includes $100 million for
    Investigations; $248 million for Flood Control, Mississippi River and
    Tributaries; $41 million for Flood Control and Coastal Emergency; $190
    million for the Regulatory Program; $134 million for the Formerly
    Utilized Sites Remedial Action Program; $184 million for the Expenses
    account and $6 million for the Office of the Assistant Secretary for
    Civil Works.
        Enclosure 1 displays the current estimate for the distribution of
    fiscal year 2010 discretionary funding among eight appropriation
    accounts, eight program areas plus executive direction and management,
    and five funding sources including the general fund of the Treasury and
    trust funds. Enclosure 2 is a crosscut between appropriation accounts
    and program areas.
        The fiscal year 2010 budget for the Civil Works program supports
    high performing new studies and construction starts.
        The budget funds three new watershed studies: Green River
    Watershed, Kentucky; Ocmulgee River Watershed, Georgia; St. Louis
    Watershed, Missouri; and a study addressing Access to Water Data. The
    budget also includes $2 million for a high-priority, interagency
    evaluation of the Nation's vulnerability to damage from flooding, the
    Water Resources Priorities study, as authorized in section 2032 of the
    Water Resources Development Act of 2007 (WRDA 2007).
        The budget also includes funding for five construction starts,
    namely Napa River Salt Marsh Restoration, California; Kansas City's,
    Missouri and Kansas flood damage reduction project; Washington, DC and
    Vicinity flood damage reduction project; Norfolk Harbor, Craney Island,
    VA; and the Bridges at Deep Creek, Virginia project on the Atlantic-
    Intracoastal Waterway.
    Restoring Louisiana Gulf Coast Wetlands
        For fiscal year 2010, the allocation for the Louisiana coastal area
    (LCA) has been increased by $5 million, from $20 million to $25 million
    in the Investigations account. Over 1 million acres of Louisiana's
    coastal wetlands have been lost since the 1930's; another one-third of
    a million acres could be lost over the next 50 years unless large-scale
    corrective actions are taken. A 10-year plan of studies, projects and
    science support was developed through a public involvement process, and
    working closely with other Federal agencies and the State of Louisiana.
    All construction activities under the plan will be subject to approval
    of feasibility level of detail documents by the Secretary of the Army.
    The increased funding level for fiscal year 2010 includes $20 million
    for the LCA ecosystem restoration program and reflects an accelerated
    schedule arising from section 7006(e)(3) of WRDA 2007. The fiscal year
    2010 amount also includes $5 million for the science needed to support
    the ongoing effort to restore the complex coastal wetland and barrier
    island ecosystem of coastal Louisiana.
    Storm Damage Reduction for the Louisiana Coast
        The Investigations account includes $3 million for completion and
    review of the ongoing Louisiana Coastal Protection and Restoration
    (LACPR) study. The final LACPR Technical Report is scheduled to be
    completed at the Corps District level in late fiscal year 2009. Funding
    included in the fiscal year 2010 budget will be used to refine and
    integrate LACPR findings and outputs regarding alternative trade-offs,
    and coastal landscape contributions to risk management, with ongoing
    Hurricane Storm Damage Reduction projects and Coastal Protection and
    Restoration projects and to delineate comprehensive plans for higher
    levels of storm surge risk reduction.
    Everglades
        In partnership with the South Florida Water Management District and
    the National Park Service, the Corps is working to restore much of the
    unique natural ecosystem value to the Everglades. The objective of the
    South Florida Ecosystem Restoration Program is to restore, protect and
    preserve the south Florida ecosystem, including the Everglades, while
    providing for other water related needs of the region. In order to move
    the program forward, the budget for the Corps provides $214 million for
    fiscal year 2010, an increase of $91 million above the amount
    appropriated in fiscal year 2009. Within this amount, the budget would
    initiate or advance construction of the three authorized projects in
    the Comprehensive Everglades Restoration Plan: Picayune Strand, Site
    One Impoundment, and Indian River Lagoon--South.

                          INLAND WATERWAYS LEGISLATION

        The budget proposes enactment of legislation to authorize a lock
    usage fee, which would over time replace the diesel fuel tax now paid
    by most commercial users of the inland and intracoastal waterways. This
    proposed legislation will improve the way that the Nation raises the
    revenue needed to cover the non-Federal share of the capital costs of
    inland and intracoastal waterways projects. The balance in the Inland
    Waterways Trust Fund (IWTF), which affects the Government's ability to
    finance the non-Federal portion of Federal capital investment in these
    waterways, has been declining since fiscal year 2002. The legislation
    will raise more revenue from the users and will do so in a way that
    improves economic efficiency compared to the existing fuel tax, by more
    closely aligning the costs of those who use the Corps locks for
    commerce with the capital costs that the Corps incurs on their behalf.
    The administration stands ready to work with the Congress and
    stakeholders with interest in these capital investments to help pass
    and implement this proposal. The amount provided in the fiscal year
    2010 budget for construction and rehabilitation of projects on the
    inland waterway system, $85 million, has been constrained to ensure
    that necessary funding will be available in the IWTF under current law,
    in the event that the proposed legislation is not in place prior to the
    beginning of fiscal year 2010.

                               OTHER INITIATIVES

    Response to Climate Change at Corps Facilities
        The Corps is working, along with other Federal agencies, to address
    the implications of climate change, which has the potential to affect
    the way in which the Corps manages its projects. The fiscal year 2010
    budget includes $5 million in the O&M account to initiate a program to
    develop and begin implementing practical, nationally consistent, and
    cost-effective approaches and policies to reduce potential
    vulnerabilities to water infrastructure resulting from climate change.
    Nationwide Evaluation of Hydropower Rehabilitation
        The budget includes $2 million in the O&M account to conduct a
    nationwide assessment of the Corps hydropower program. This initiative
    will help to develop a long-term programmatic investment strategy based
    on a national approach to prioritizing hydropower replacement studies
    and projects.
    Low Commercial Use Navigation Pilot Project
        The budget emphasizes the safe and reliable operation of key
    infrastructure assets that are of central importance to the Nation,
    including federally maintained channels and harbors that support high
    volumes of commercial commerce. From a national perspective, projects
    that no longer carry significant commercial traffic nor serve to meet
    subsistence or safety needs have a lower priority. However, many of
    these low commercial use projects remain important locally to the
    people that they serve.
        The fiscal year 2010 budget includes a $1.5 million pilot project
    in the O&M account to develop and encourage alternate non-traditional
    ways to fund maintenance of low commercial use harbors and waterways.
    The pilot project would focus on the Atlantic Coast and Chesapeake Bay
    in the North Atlantic and South Atlantic Divisions of the Corps. It
    will identify the universe of Federal harbors and inland waterway
    segments that support lower levels of commercial use and their
    respective non-Federal sponsors. The project will also formulate a
    range of possible long-term options for the funding and management of
    such facilities, evaluate the pros and cons of these options, and
    examine their applicability to the various types of low use navigation
    projects. This initiative also envisions that more regional general
    permits will be developed through the Corps' Regulatory Program to
    streamline efforts by non-Federal entities to accomplish the
    maintenance of these channels harbors.

             PLANNING IMPROVEMENTS AND PERFORMANCE-BASED BUDGETING

        The Army continues working through the Chief of Engineers to
    strengthen and improve the planning expertise of the Corps, including
    greater support for planning Centers of Expertise, better integration
    of project purposes, and greater reliability of cost estimates and
    schedules in both planning and programming processes. These efforts
    have already begun and will ultimately improve all of our project
    reports.
        The fiscal year 2010 budget continues the Civil Works program's
    commitment to a performance-based approach to budgeting. Competing
    investment opportunities for studies, design, construction, and
    operation and maintenance were evaluated using multiple metrics. The
    Army used and will continue to use objective, performance criteria to
    guide its recommendations on the allocation of funds.
        The Army applied objective performance guidelines to its many
    competing construction projects in order to establish priorities among
    them and to guide the allocation of funds to high-performing ongoing
    projects and high-performing new construction starts. These guidelines
    focus construction funds on those investments within the three main
    mission areas of the Corps that provide the best return from a national
    perspective in achieving economic, environmental, and public safety
    objectives. Similarly, the Army used objective performance criteria to
    allocate O&M funds in the fiscal year 2010 budget. The O&M criteria
    consider both the condition of the project and the potential
    consequences for project performance if the O&M activity were not
    undertaken in fiscal year 2010.
        In fiscal year 2010 the Corps will focus efforts on developing new
    strategies, along with other Federal agencies and non-Federal project
    partners, to better manage, protect, and restore the Nation's water and
    related land resources, including floodplains, flood-prone areas, and
    related ecosystems. The Corps also will continue to pursue management
    reforms that improve project cost and schedule performance to ensure
    the greatest value from invested resources, while strengthening the
    accountability and transparency of the way in which taxpayer dollars
    are being spent.

                     AMERICAN RECOVERY AND REINVESTMENT ACT

        The American Recovery and Reinvestment Act provided $4.6 billion
    for the Civil Works program. That amount included $2 billion for the
    Construction account; $2.075 billion for O&M account; $375 million for
    Flood Control, Mississippi River and Tributaries; $25 million for
    Investigations; $25 million for the Regulatory Program; and $100
    million for the Formerly Used Sites Remedial Action Program. Economists
    estimate the Corps' Recovery Act appropriation will create or maintain
    approximately 57,400 direct construction industry jobs and an
    additional 64,000 indirect and induced jobs in firms supplying or
    supporting the construction and the businesses that sell goods and
    services to these workers and their families.
        The Corps will manage and expend these funds so as to achieve the
    Recovery Act's stated purposes, including both commencing expenditures
    as quickly as possible consistent with prudent management and investing
    in infrastructure and ecosystem restoration that will provide long-term
    benefits. The Civil Works allocations also are fully consistent with
    the President's direction provided in the Executive Memorandum of March
    20, 2009--Ensuring Responsible Spending of Recovery Act Funds. In that
    Memorandum, the President directed agencies to ensure that Recovery Act
    funds are spent responsibly and transparently and that projects are
    selected on merit-based principles.
        Moreover, the Civil Works allocations are consistent with
    additional project selection criteria provided in the Conference
    Committee report accompanying the act that projects, programs or
    activities that are accomplished with Recovery Act dollars will be
    obligated and executed quickly; will result in high, immediate
    employment; have little schedule risk; will be executed by contract or
    direct hire of temporary labor; and will complete a project phase, a
    project, an element, or will provide a useful service that does not
    require additional funding. Also as stipulated in the Recovery Act, no
    funds will be used for any PPA that, at the time of the obligation, has
    not received appropriations provided for Energy and Water Development.
        The Corps selected approximately 170 activities in the Construction
    account, 520 in the Operation and Maintenance account, 45 in the
    Mississippi and Tributaries account, 70 in the Investigations account,
    and 9 in the FUSRAP account. These activities mostly involve the
    funding of work under a single contract, though in some cases projects
    or useful increments of projects will be completed.
        The wide geographic distribution of projects spreads the employment
    and other economic benefits across the United States. Funding also is
    distributed across Civil Works programs to provide the Nation with
    project benefits related to inland and coastal navigation, the
    environment, flood risk management, hydropower, recreation, and more.

                                   CONCLUSION

        The administration has made rebuilding America's infrastructure a
    priority. Through resources provided for the Army Civil Works program
    in the President's budget for fiscal year 2010, the Corps can help
    achieve this objective. We seek to apply 21st century technological
    advances to present day challenges, while protecting and restoring
    significant ecological resources.
        Mr. Chairman, I am proud to support the fiscal year 2010 budget for
    the Army Civil Works program. I look forward to working with this
    subcommittee and to your support of the President's Budget proposals.
    Thank you.

                                  ENCLOSURE 1

     DEPARTMENT OF THE ARMY--CORPS OF ENGINEERS--CIVIL WORKS BUDGET SUMMARY,
                                FISCAL YEAR 2010
    ------------------------------------------------------------------------
                                                                 Amount
    ------------------------------------------------------------------------
    Requested New Appropriations by Account:
        Investigations...................................      $100,000,000
        Construction.....................................  \1\ 1,718,000,000
        Operation and Maintenance........................  \2\ 2,504,000,000
        Regulatory Program...............................       190,000,000
        Mississippi River and Tributaries................       248,000,000
        Expenses.........................................       184,000,000
        Flood Control and Coastal Emergencies............        41,000,000
        Formerly Utilized Sites Remedial Action Program..       134,000,000
        Office of the Assistant Secretary................         6,000,000
                                                          ------------------
          TOTAL..........................................     5,125,000,000
                                                          ==================
    Sources of New Appropriations:
        General Fund.....................................    (4,204,000,000)
        Harbor Maintenance Trust Fund....................      (793,000,000)
        Inland Waterways Trust Fund......................       (85,000,000)
        Special Recreation User Fees.....................       (43,000,000)
                                                          ------------------
          TOTAL..........................................    (5,125,000,000)
                                                          ==================
    Additional New Resources:
        Rivers and Harbors Contributed Funds.............   \3\ 369,000,000
        Coastal Wetlands Restoration Trust Fund..........    \4\ 86,000,000
        Permanent Appropriations.........................         9,000,000
                                                          ------------------
          TOTAL ADDITIONAL NEW RESORCES..................       464,000,000
                                                          ==================
          TOTAL PROGRAM FUNDING..........................     5,589,000,000
    ------------------------------------------------------------------------
    \1\ Includes $85,000,000 from the Inland Waterways Trust Fund.
    \2\ Includes $793,000,000 from the Harbor Maintenance Trust Fund and
      $43,000,000 in Special Recreation User Fees.
    \3\ Cost Sharing contributions required by law for budgeted work
      financed 100 percent by non-Federal interest.
    \4\ Transferred from the Sport Fish Restoration Account of the Aquatic
      Resources Trust Fund for planning, protection, and restoration of
      coastal wetlands in the State of Louisiana.

        Senator Dorgan. Mr. Salt, thank you very much. We
    appreciate your being here today.
        General Robert L. Van Antwerp, the Chief of Engineers for
    the U.S. Army Corps of Engineers. Thank you for being here,
    General. You may proceed.
        Let me just make the point that the written testimony that
    you have submitted will be made a part of the permanent record
    and you may summarize.

    STATEMENT OF LIEUTENANT GENERAL ROBERT VAN ANTWERP,
                CHIEF OF ENGINEERS
        General Van Antwerp. Thank you very much, Chairman Dorgan.
    It's great to see you again and thanks for the opportunity to
    testify on the fiscal year 2010 President's budget.
        I'd like to just set a couple of data points before I talk
    about the budget. For the Corps of Engineers, by the end of
    this year we'll have over $40 billion obligated under contract.
    It's the largest in the history of the Corps and we're
    celebrating our 234th birthday on June 16. So it is really a
    historic time in the Corps.
        In order to get this work done, we need to hire 3,300
    people, and we are about halfway there. For the Recovery Act,
    those will be temporary hires and contracts. For the regular
    program, of which of that $40 billion, $10 billion of that will
    be in the Civil Works area that will be under contract by the
    end of this year. So this is a very, very exciting time.
        A couple of other data points, the dams that are owned and
    operated by the Corps number 650. There are 10 of those dams
    that are in this budget for construction, for dam safety. We
    have over 12,000 miles of inland waterways that we're
    responsible for owning and operating. That really constitutes a
    lot of what enables the shipping industries to get goods to
    market.
        We have 241 lock chambers at 195 different sites. Most of
    those were built about 52 years ago. In fact, the average is
    52.5 years old for those lock chambers. So a lot of that O&M
    goes to getting at some of those facilities that greatly need
    that effort.
        We have 926 harbors that are maintained by the Corps of
    Engineers. The amount of dredging material on a given year
    averages over 200 million cubic yards. Of course, the disposal
    of that and the beneficial use of that dredged material is of
    great concern to us, and we want to use that in the most
    beneficial manner.
        We have over 11,000 miles of levees. Actually, that only
    constitutes about 16 percent of the levees in this country.
    Most of the Nation's levees are agricultural levees and others.
    But 16 percent of them are built and controlled by the Corps.
        We have 75 generating plants in hydropower. We generate
    about 24 percent of the U.S. hydropower.
        Then finally, just a data point, we had 370 million
    visitors to our project sites last year. It's really a great
    opportunity for recreation for the people of America.
        This is a performance-based budget. It completes 10
    projects, 4 in navigation, 6 are in flood and coastal storm
    damage reduction. Just broken down by percentage of this
    budget, 11 percent of the budget went for environmental things,
    35 percent for navigation, and 32 percent for flood and coastal
    storm damage reduction.
        In the construction program, it funds 93 construction
    projects, including the 10 dam safety that I mentioned, 9
    projects that address significant risk to human safety, and 8
    are project completions. There are five new starts in this
    budget.
        The O&M, as you've mentioned, is a 14 percent increase and
    this is much needed because of the age of a lot of those
    facilities.
        I want to give just a quick update on New Orleans. We're on
    track to make the 2011 hurricane season with the 100-year storm
    protection.
        Just a quick word on Iraq and Afghanistan, over the course
    of the years we have deployed more than 10,000 people over
    there. A couple of weeks ago we had our first civilian death.
    So there has been mourning, but we are taking care of that
    family and doing what's right there.

                               PREPARED STATEMENT

        Finally on the Recovery and Reinvestment Act, we anticipate
    by the end of this year, September 30, 2009, we'll have 45
    percent of that $4.6 billion obligated. It constitutes more
    than a thousand contract actions altogether.
        Sir, thank you for the opportunity to be here this morning
    and I look forward to the questions.
        [The statement follows:]

          Prepared Statement of Lieutenant General Robert Van Antwerp

        Mr. Chairman and distinguished members of the subcommittee, I am
    honored to be testifying before your subcommittee today, along with the
    Acting Assistant Secretary of the Army (Civil Works), Mr. Terrence
    Salt, on the President's fiscal year 2010 budget for the United States
    Army Corps of Engineers' Civil Works Program.
        My statement covers the following 5 topics:
      --Summary of Fiscal Year 2010 Program Budget
      --Investigations Program
      --Construction Program
      --Operation and Maintenance Program
      --Value of the Civil Works Program to the Nation

                   SUMMARY OF FISCAL YEAR 2010 PROGRAM BUDGET

    Introduction
        The fiscal year 2010 Civil Works budget is a performance-based
    budget, which makes the best use of available funds through a focus on
    the projects and activities that provide the highest economic and
    environmental returns on the Nation's investment or address significant
    risk to human safety. The Civil Works budget consists of a
    discretionary funding request of $5.125 billion and mandatory funding
    of $464 million, for a total direct program of $5.589 billion. In
    addition, Reimbursable Program funding, work that the Corps does for
    other agencies and entities with those agencies' and entities' funds,
    will be approximately $2.5 billion.
    Direct Program
        The budget reflects the administration's commitment to the sound
    management of the Nation's water resources. The budget incorporates
    objective performance-based metrics for the construction and the
    operation and maintenance programs, and for proposed projects
    undergoing preconstruction engineering and design. It provides a high
    level of funding for maintenance, with a focus on those facilities that
    are of central importance to the Nation. It provides funding for the
    regulatory program to protect the Nation's waters and wetlands, and
    supports restoration of aquatic ecosystems. Additionally, it emphasizes
    the need to fund emergency preparedness and training activities for the
    Corps as part of the regular budget process.
    Reimbursed Program
        Through the Interagency and Intergovernmental Services Program we
    help non-DOD Federal agencies, State, local, and tribal governments,
    and other countries with technical assistance in the areas of planning,
    engineering and construction. Rather than develop an internal workforce
    to oversee large design and construction projects, these entities
    utilize the skills and talents that we bring to our own Civil Works and
    Military Program missions. Our support is primarily through the
    development of contracts with private sector firms to perform technical
    assistance and management of engineering, environmental, and
    construction projects. This portion of our work is totally reimbursed
    by the agencies and entities that seek our assistance.
        Currently, we provide reimbursable support for about 70 Federal
    agencies and several State and local governments. Total reimbursement
    for such work in fiscal year 2010 is projected to be approximately $2.5
    billion. The exact amount will depend on the extent of fiscal year 2010
    assignments.

                             INVESTIGATIONS PROGRAM

        The budget for the investigations program would enable the Corps to
    evaluate and design the future projects that are most likely to be
    high-performing, within the Corps three main missions: Commercial
    navigation, flood and storm damage reduction, and aquatic ecosystem
    restoration. The budget includes $100 million for these and related
    activities in the Investigations account and $2.084 million in the
    Mississippi River and Tributaries account.
        This year the budget includes three new watershed studies, Ocmulgee
    River Basin Watershead, Georgia; Green River Watershed, Kentucky; and
    St. Louis Missouri River Watershed, Missouri; and a study addressing
    Access to Water Data. The budget also includes $2 million for a high-
    priority, interagency evaluation of the Nation's vulnerability to
    damage from flooding, the Water Resources Priority study, as authorized
    in section 2032 of the Water Resources Development Act of 2007 (WRDA
    2007).

                              CONSTRUCTION PROGRAM

        The fiscal year 2010 budget includes $1.718 billion in
    discretionary funding in the Construction account and $87.343 million
    in the Mississippi River and Tributaries account to further this
    objective.
        The budget funds 93 construction projects, including 10 dam safety
    assurance, seepage control, and static instability correction projects,
    9 projects that address a significant risk to human safety, and 8
    project completions. Also, the budget provides significant funding for
    Corps aquatic ecosystem restoration efforts in South Florida including
    the Everglades, and in the Columbia River Basin and the Missouri River
    Basin, where this work supports the continued operation of Corps of
    Engineers multi-purpose projects by meeting the requirements of the
    Endangered Species Act.
        This budget includes funding for five new, high performing,
    construction projects. These include Washington, DC and vicinity flood
    risk reduction project; the Deep Creek Bridge Replacement, Virginia
    project on the Atlantic-Intercostal Waterway; the Norfolk Harbor,
    Craney Island, Virginia project; the Kansas City, Missouri and Kansas
    City, Kansas flood risk reduction project; and the Napa River Salt
    Marsh, California environmental restoration project.
        The budget uses objective performance measures to establish
    priorities among projects, and through continued proposed changes in
    the Corps contracting practices, that will also increase control over
    future costs. The performance measures used include the benefit-to-cost
    ratios for projects whose primary outputs are economic and are measured
    by economic returns. The selection process also gives priority to dam
    safety assurance, seepage control, static instability correction, and
    to projects that address a significant risk to human safety. Under each
    of these criterions, resources are allocated based on performance. This
    approach significantly improves overall program performance.

                       OPERATION AND MAINTENANCE PROGRAM

        As soon as the Corps constructs a project, the infrastructure
    begins to age. Generally, with periodic maintenance, we can operate our
    facilities for many years. The budget supports our continued
    stewardship of this infrastructure by focusing funding on key
    infrastructure that is of central importance to the Nation.
        The Operation and Maintenance (O&M) program for the fiscal year
    2010 budget includes $2.504 billion in the O&M account and an
    additional $158.573 million under the Mississippi River and Tributaries
    program. The Corps used objective performance criteria to allocate
    operation and maintenance funds to facilities. These criteria
    considered both the condition of the project and the potential
    consequences for project performance if the O&M activity is not
    undertaken in the 2010 budget. The focus is on the maintenance of key
    commercial navigation, flood and storm damage reduction, hydropower,
    and other facilities. Specifically, the operation and maintenance
    program supports completed works owned or operated by the Corps of
    Engineers. Other work to be accomplished includes dredging, repair,
    aquatic plant control, removal of sunken vessels, monitoring of
    completed coastal projects, and operation of structures and other
    facilities, as authorized in the various River and Harbor, Flood
    Control, and Water Resources Development Acts.

                 VALUE OF THE CIVIL WORKS PROGRAM TO THE NATION

        We are privileged to be a part of an organization that directly
    supports the Nation's infrastructure. The way in which we manage our
    water resources can improve the quality of our citizens' lives and the
    environment in which we live.
        For example, Corps personnel from across the Nation continue to re-
    construct and improve the storm damage reduction system for New
    Orleans. Their work will reduce the risk of damage from future storms
    to people and communities.
    Research and Development
        The Research and Development Program for the Civil Works Program
    provides innovative engineering products, some of which can have
    applications in the private sector and in the military infrastructure
    sphere as well. By creating products that improve the efficiency and
    competitiveness of the Nation's engineering and construction industry
    and providing more cost-effective ways to operate and maintain
    infrastructure, Civil Works program research and development
    contributes to the national economy.

                                   CONCLUSION

        The Corps of Engineers is committed to staying at the leading edge
    of service to the Nation. We're committed to change that ensures an
    open, transparent, and performance-based Civil Works Program.
        Thank you, Mr. Chairman and members of the subcommittee. This
    concludes my statement.

        Senator Dorgan. General, thank you. We appreciate your
    being here and your testimony.

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    STATEMENT OF DEANNA ARCHULETA, ACTING ASSISTANT
                SECRETARY FOR WATER AND SCIENCE
    ACCOMPANIED BY REED R. MURRAY, PROGRAM DIRECTOR, CENTRAL UTAH PROJECT
                COMPLETION ACT OFFICE

        Senator Dorgan. Next we'll hear from Acting Assistant
    Secretary Deanna Archuleta. Thank you very much. You may
    proceed.
        Ms. Archuleta. Thank you. Thank you, Mr. Chairman,
    Senators, subcommittee members. Thank you for the opportunity
    to appear before you in support of the President's fiscal year
    2010 budget request for Bureau of Reclamation and the Central
    Utah Project Completion Act. With me today are Mike Connor,
    Commissioner of Bureau of Reclamation, and additionally we have
    Reed Murray, the Director of the Central Utah Project
    Completion Act office, should you have any questions regarding
    that program.
        I have submitted written testimony which presents a
    detailed summary of the Department's appropriation request.
    Today I would like to highlight the Department's 2010
    priorities and touch briefly on Reclamation and the Central
    Utah Project request, before turning it over to Commissioner
    Connor for a more detailed discussion on Reclamation's request.
        The Department of the Interior's mission is complex and
    multifaceted. Our program's missions stretch from the North
    Pole to the South Pole, across 12 different time zones, from
    the Caribbean to the Pacific Rim. Nearly every American lives
    within 1 hour driving distance from either our lands, our
    waters, all of which are managed by the Department of the
    Interior. As Secretary Salazar has said, the Department of the
    Interior is truly the Department of America.
        Our fiscal year 2010 budget of $12.1 billion will position
    us to provide enduring benefits to the American people by
    maximizing our opportunities to realize the potential of our
    lands, our waters, our resources, and our people. As you know,
    the Department has released a detailed implementation plan for
    $3 billion appropriated in the American Reinvestment and
    Recovery Act, which provided $1 billion for programs funded by
    this subcommittee. The Department, Reclamation, and the Central
    Utah Project Completion Act programs are moving expeditiously
    with our customers to invest those funds, which will quickly
    provide jobs and stimulate the economy.
        The fiscal year 2010 budget request for the Department of
    the Interior focuses on creating new energy frontiers, tackling
    climate change impacts, including the emphasis on water
    conservation, protecting America's treasures, and establishing
    a 21st Century Youth and Conservation Corps. And our fiscal
    year 2010 budget also assumes commitment to restoring the
    integrity of our Government to Government relationships with
    our Indian tribes and empowering our Native American
    communities.
        This is an overwhelming need to tackle climate change
    impacts. The key aspects of climate impacts, particularly in
    the West, are an increased variability of our water supplies.
    Our fiscal year 2010 Reclamation budget is proposing water
    conservation initiatives of $46 million, which will take
    significant steps toward addressing western water issues
    through three ongoing programs: an expansion of our water
    conservation challenge grant program, Reclamation's basin study
    program, and the title 16 water reclamation and reuse program.
    Through these programs, Reclamation will provide competitive
    grants for water marketing and conservation projects, basin
    wide planning studies that will address impacts of climate
    change and continued funding of water reuse and recycling
    projects.
        With regards to the programs under the jurisdiction of this
    subcommittee, the fiscal year 2010 request for Bureau of
    Reclamation and the Central Utah Project Completion Act is $1.1
    billion. I will defer to Commissioner Connor to discuss the
    details of Reclamation's request, but note that their 2010
    proposals support managing, developing, protecting water and
    the related resources in an environmentally and economically
    sound manner.
        Reclamation continues to strive for the highest levels of
    service to the American people and the highest levels of
    management excellence.
        The request for implementation for the Central Utah Project
    Completion Act is $42 million. The fiscal year 2010 funding
    provides funding for design, construction, and features of the
    Utah lake system, continues to implement water management
    improvement projects, as well as implementing fish, wildlife,
    and recreation mitigation, as well as other conservation
    projects.
        Through the Department's fiscal year 2010, we have a
    tremendous opportunity to improve the future of our children
    and our grandchildren with wise investments in clean energy,
    climate impacts, treasured landscapes, our youth, and the
    empowerment of Native Americans.

                              PREPARED STATEMENTS

        I appreciate the strong support this subcommittee has given
    the Department, in particular to the Bureau of Reclamation and
    to the Central Utah Project. I look forward to working with all
    of you in advancing those goals of all of our programs and
    would be happy to answer any questions you may have.
        [The statements follow:]

                     Prepared Statement of Deanna Archuleta

        Mr. Chairman, Mr. Bennett, and members of this subcommittee, I am
    pleased to appear before this subcommittee today to discuss the
    President's fiscal year 2010 budget for the Department of the Interior
    and to update you on progress in implementing our fiscal year 2009
    programs.
        The Department of the Interior's mission is complex and
    multifaceted. Our programs and mission stretch from the North Pole to
    the South Pole and across 12 time zones, from the Caribbean to the
    Pacific Rim. Our extensive mandate rivals any government agency in its
    breadth and diversity--and its importance to the everyday lives of
    Americans.
        Interior manages 500 million acres or about 1 in every 5 acres in
    the United States, including 391 national park units, 550 wildlife
    refuges, the 27 million-acre National Landscape Conservation System,
    and other public lands. These places are treasured landscapes and serve
    as economic engines for tourism and growth opportunities for
    recreation, wildlife conservation, and responsible resource use.
        The Department's public lands and 1.7 billion acres on the Outer
    Continental Shelf supply nearly one-third of the Nation's domestic
    energy production. These resources are vital to the Nation's energy
    security and provide economic returns to the Nation. In fiscal year
    2010, an estimated $14.0 billion in revenues will be generated from
    these lands and waters.
        The Department fulfills its special responsibilities to Native
    Americans managing one of the largest land trusts in the world
    including over 56 million acres held in trust for Indian tribes and
    individual Indians, over $3.4 billion of funds held in over 2,700
    tribal trust accounts, and over 380,000 open individual Indian Money
    accounts. The Bureau of Indian Education school system provides
    services to approximately 42,000 students in 23 States attending 183
    elementary and secondary schools and supports 30 tribally controlled
    community colleges, universities, and post-secondary schools.

                               THE FIRST 100 DAYS

        Recently, President Obama and Secretary Salazar marked their first
    140 days in office. It has been an exciting time as Secretary Salazar
    has begun to change how the Department of the Interior does business.
    He has already implemented changes to improve accountability,
    transparency, and ethical reform; established a vision for a new energy
    frontier that will help to produce and transmit renewable energy from
    our public lands; set an agenda for protecting America's open spaces
    and treasured landscapes with stewardship based on sound science; began
    strengthening the government-to-government relationship with Indian
    tribes; announced a new 21st Century Youth Conservation Corps; and
    implemented the President's economic recovery plan.
        The Department has released detailed implementation plans for $3
    billion appropriated in the American Recovery and Reinvestment Act that
    could significantly improve the safety and energy efficiency of our
    facilities; the reliability of our water infrastructure; and habitat
    for wildlife including endangered species.
        Thanks to your support, the Recovery Act provided $1 billion for
    the programs funded by this subcommittee.
        The Department, Reclamation and the Central Utah Project Completion
    Act program are moving expeditiously with our customers to invest funds
    appropriated by the Recovery Act in projects which will quickly provide
    jobs and stimulate the economy. As Secretary Salazar announced on April
    15, $945.2 million is being devoted to Reclamation recovery projects in
    six program investments areas:
      --Meeting Future Water Supply Needs--$450.9 million
      --Infrastructure Reliability and Safety--$164.5 million
      --Environmental/Ecosystem Restoration--$236.3 million
      --Green Buildings--$13.5 million
      --Water Conservation Initiative (Challenge Grants)--$40.0 million
      --Emergency Drought Relief--$40.0 million
        As permitted by the Recovery Act, $50.0 million is being
    transferred to the Department's Central Utah Project Completion Act for
    work that includes continuing construction of both the Spanish Fork
    Canyon Pipeline and the Spanish Fork--Provo Reservoir Canal Pipeline,
    as well as the construction of the Big Springs Fish Hatchery for the
    Ute Indian Tribe. Finally, as permitted by the statute, $4.8 million is
    being set aside for management and oversight.

                    OVERVIEW OF THE FISCAL YEAR 2010 BUDGET

        The fiscal year 2010 Interior budget request for current
    appropriations is $12.1 billion, $802.0 million or 7.1 percent above
    the level enacted by Congress for fiscal year 2009. This comparison
    excludes $3 billion enacted in the Recovery Act. Permanent funding that
    becomes available as a result of existing legislation, without further
    action by the Congress, will provide an additional $6.1 billion,
    providing a total of $18.2 billion for Interior in fiscal year 2010.
        The request for the Bureau of Reclamation and the Central Utah
    Project Completion Act, funded under the jurisdiction of this
    subcommittee, is $1.2 billion for net discretionary funding. This is a
    decrease of $37.4 million below the level enacted for fiscal year 2009.
    This comparison excludes $1 billion in enacted Recovery Act funding.
    The fiscal year 2010 Reclamation discretionary budget request is $985.6
    million in current appropriations and the request for the Central Utah
    Project is $42.0 million, the same as fiscal year 2009 enacted. The
    decreases in Reclamation are primarily in title XVI and rural water,
    areas that received significant increases through the Recovery Act
    ($135 million for title XVI and $200 million for rural water projects)
    and through earmarks in fiscal year 2009. These decreases are also
    somewhat offset by fiscal year 2010 increases for the new Water
    Conservation Initiative, the dam safety program, the Central Valley
    Project, and increases in several other programs.

                            TACKLING CLIMATE IMPACTS

        There is an overwhelming need to tackle climate change impacts.
    With lands that range from the Arctic to the Everglades, Interior's
    managers expect to observe the sometimes dramatic effects of a changing
    climate, including thawing permafrost and melting glaciers, changes in
    precipitation patterns, and sea level rise. In this dynamic context,
    Interior managers need information, tools, and resources to measure,
    understand, and respond to on-the-ground impacts. As the largest land
    manager in the Nation, Interior is positioned to pioneer adaptive
    management approaches to address the effects of climate change.

                         WATER CONSERVATION INITIATIVE

        A key aspect of climate impacts, particularly in the West, is
    increased variability of water supplies. The request includes funding
    for a comprehensive water conservation program focused on expanding and
    stretching limited water supplies in the West to reduce conflict,
    facilitate solutions to complex water issues, and meet the growing
    needs of expanding municipalities, the environment, and agriculture.
        The Department of the Interior has an important role to play in
    providing leadership and assistance to States, tribes, and local
    communities to address these competing demands for water. In fiscal
    year 2010, Reclamation is proposing a Water Conservation Initiative
    (WCI), at $46 million, which will take a significant step toward
    addressing western water issues through three ongoing programs. The WCI
    includes: (1) an expanded Water Conservation Challenge Grant Program
    (increased by $26 million over fiscal year 2009); (2) Reclamation's
    Basin Study Program; and (3) the title XVI Water Reclamation and Reuse
    Program. Through these programs, Reclamation will provide competitive
    grants for water marketing and conservation projects, and basin-wide
    planning studies that will provide projections of future water supply
    and demand on a basin-wide scale and address the impacts of climate
    change and drought.
        The Bureau of Reclamation's fiscal year 2010 net discretionary
    budget request of $1.0 billion is offset by $35.1 million in funds from
    the Central Valley Project Restoration Fund. This request supports
    Reclamation's mission of managing, developing, and protecting water and
    related resources in an environmentally and economically sound manner
    in the interest of the American people. The budget emphasizes reliable
    water delivery and power generation by requesting more than $427.2
    million to fund operation, maintenance, and rehabilitation activities
    at Reclamation facilities.
        To address important infrastructure funding needs, the budget
    includes an increase of $13.6 million for the Bureau of Reclamation's
    Safety of Dams program. This will allow the Bureau to address
    corrective actions at Folsom Dam and other high priority projects.
        Reclamation is currently developing programmatic criteria for a
    Rural Water Program as required under the Reclamation Rural Water
    Supply Act of 2006. Reclamation expects to begin appraisal level
    studies in fiscal year 2009. The fiscal year 2010 budget includes $64.0
    million for seven ongoing authorized rural water projects. Within this,
    $48.7 million supports the administration's commitment to complete
    seven ongoing authorized rural water projects including ongoing
    municipal, rural and industrial systems for the Pick Sloan-Missouri
    Basin Program--Garrison Diversion Unit in North Dakota; the Mni Wiconi
    and Perkins County in South Dakota, Lewis and Clark in South Dakota,
    Iowa, and Minnesota; Ft. Peck and North Central Mountain/Rocky Boys in
    Montana; and Jicarilla in New Mexico. Funding for the required
    operations and maintenance component of rural water projects is $15.3
    million for fiscal year 2010. For the construction component,
    Reclamation allocated funding based on objective criteria that gave
    priority to projects nearest to completion and projects that serve
    tribal needs.
        The $54.2 million budget for Animas-La Plata provides for
    directional drilling and pipeline construction on the Navajo Nation
    Municipal Pipeline, the first fill of Lake Nighthorse and construction
    of County Road 211 relocation will continue.
        The Bureau will complete removal of the Savage Rapids Dam in fiscal
    year 2010. The budget includes $23.7 million for the Middle Rio Grande
    project to continue to focus on the protection and recovery of the
    silvery minnow and southwestern willow flycatcher.
        The fiscal year 2010 request includes $2.0 million for the Bureau
    of Reclamation and $2.0 million for the U.S. Fish and Wildlife Service
    to further assess the costs and benefits of removing PacifiCorp's four
    dams on the Lower Klamath River. These studies will be conducted by
    Reclamation and FWS in coordination with BLM, BIA, the U.S. Forest
    Service, and the National Oceanic and Atmospheric Administration's
    National Marine Fisheries Service. The results of the study will be
    used by the Federal Government to determine if the potential benefits
    outweigh the costs of dam removal. Consideration will be given to the
    liabilities, environmental risks, and effects on downstream resources
    resulting from dam removal.
        The budget request for CALFED is $31.0 million, continuing
    implementation of priority activities that will resolve water conflicts
    in the Bay-Delta of California. Funds will be used for water storage,
    the conveyance program, water recycling and conservation, the science
    program, water quality assurance investigations, ecosystem restoration
    projects, and the oversight function to ensure program balance and
    integration.

            PICK SLOAN LEGISLATIVE PROPOSAL (BUREAU OF RECLAMATION)

        The fiscal year 2010 budget request for Reclamation is accompanied
    by a proposal that will affect receipt levels in fiscal year 2010 and
    in future years. This proposal will be transmitted separately from the
    budget for consideration by congressional authorizing committees. The
    proposal is for a reallocation of the repayment of capital costs for
    the Pick-Sloan Missouri Basin program.

                                   CONCLUSION

        Thank you for the opportunity to testify on behalf of the
    President's fiscal year 2010 budget request for the Department of the
    Interior. I want to reiterate my appreciation for the long-standing
    support of this subcommittee. Our fiscal year 2010 budget will--in its
    entirety--make a dramatic difference for the American people. We have a
    tremendous opportunity to improve the future for our children and
    grandchildren with wise investments in clean energy, climate impacts,
    treasured landscapes, our youth, and the empowerment of Native
    Americans. This concludes my overview of the fiscal year 2010 budget
    proposal for the Department of the Interior and my written statement. I
    will be happy to answer any questions that you may have.
                                     ______

                      Prepared Statement of Reed R. Murray

        My name is Reed Murray. I serve as the Program Director of the
    Central Utah Project Completion Act Office under the Assistant
    Secretary--Water and Science in the Department of the Interior. I am
    pleased to provide the following information about the President's
    fiscal year 2010 budget for implementation of the Central Utah Project
    Completion Act.
        The Central Utah Project Completion Act, titles II-VI of Public Law
    102-575, provides for completion of the Central Utah Project (CUP) by
    the Central Utah Water Conservancy District. The act also authorizes
    funding for fish, wildlife, and recreation mitigation and conservation;
    establishes an account in the Treasury for deposit of these funds and
    other contributions; establishes the Utah Reclamation Mitigation and
    Conservation Commission to coordinate mitigation and conservation
    activities; and provides for the Ute Indian Rights Settlement.
        The act provides that the Secretary may not delegate his
    responsibilities under the act to the Bureau of Reclamation. As a
    result, the Department has established an office in Provo, Utah, with a
    Program Director to provide oversight, review and liaison with the
    District, the Mitigation Commission, and the Ute Indian Tribe, and to
    assist in administering the responsibilities of the Secretary under the
    act.
        The 2010 request for the Central Utah Project Completion Account
    provides $42.0 million for use by the District, the Mitigation
    Commission, and the Department to implement titles II-IV of the act.
    The project is currently scheduled to be completed by 2021.
        The fiscal year 2010 request for the District includes $37.7
    million to fund the designs, specifications, land acquisition, and
    construction of the Utah Lake System ($30.8 million); to implement
    water conservation measures ($5.9 million); and to implement
    groundwater conjunctive use projects ($1.0 million).
        The request includes $1.5 million for the Mitigation Commission.
    Approximately $1.2 million will be used to implement the fish,
    wildlife, and recreation mitigation and conservation projects
    authorized in title III. The Commission will use the remaining portion
    ($271,200) for completing mitigation measures committed to in pre-1992
    Bureau of Reclamation planning documents.
        Finally, the request includes $2.8 million for the Program Office
    for operation and maintenance costs associated with instream flows;
    $1.1 million for fish hatchery facilities; and $1.7 million for program
    administration.
        In conclusion, we appreciate the opportunity to testify before the
    subcommittee and would be happy to respond to any questions.

        Senator Dorgan. Madam Secretary, thank you very much for
    being here.
        Commissioner Connor, welcome. You may proceed.

    STATEMENT OF MICHAEL L. CONNOR, COMMISSIONER
    ACCOMPANIED BY BOB WOLF, DIRECTOR OF PROGRAM AND BUDGET

        Mr. Connor. Thank you, Mr. Chairman.
        Mr. Chairman, Senator Bond, Senator Alexander, thank you
    for the opportunity to appear before you today in support of
    the President's fiscal year 2010 budget request for the Bureau
    of Reclamation. With me today is Bob Wolf, who is our Director
    of Program and Budget.
        Mr. Chairman, I'd just like to say it's very much a
    pleasure for me to be here at the witness table today. But as I
    told Roger and Scott earlier, I'm soon to find out that it's
    much more comfortable to do these hearings behind the dais, I
    think, than where I am today.
        The fiscal year 2010 discretionary budget request for
    Reclamation is $986 million. I have submitted written
    testimony. In the interest of time, as well as the fact that as
    a former Senate staff member, I should know the value of
    brevity, I'll quickly summarize three areas of the budget that
    we want to focus on. I also want to talk a little bit about
    Secretary Salazar's Water Conservation Initiative, which the
    Assistant Secretary just mentioned.
        The first area is maintaining our existing infrastructure.
    Reclamation's budget reflects the need to maintain our existing
    portfolio of projects. Reclamation has 476 dams, 348
    reservoirs, 58 power plants, and many other water delivery
    facilities. Much of that infrastructure is at least 50 years or
    older and its proper operation and maintenance is our top
    priority.
        About $427 million of Reclamation's discretionary budget is
    dedicated to making sure that our facilities are operated and
    maintained in a safe and reliable fashion. This is a 21 percent
    increase just over the last 2 years, but providing adequate
    funding for these activities continues to be one of
    Reclamation's highest priorities.
        Part of that program is our dam safety program. In
    Reclamation's infrastructure portfolio there are 371 dams and
    dikes that could result in loss of life if they were to fail.
    These structures form the core of Reclamation's Dam Safety
    Program. A total of $102 million is requested for this program,
    which is about a $14 million increase over the 2009 enacted
    level.
        The second area I want to focus on is new water
    development. Reclamation continues to be actively involved in
    programs to develop new water supplies and infrastructure.
    Examples of these ongoing water development activities in the
    fiscal year 2010 budget request include: the Animas-La Plata
    project, for which there is $54 million allocated to continue
    implementation of the Colorado Ute Settlement Act and Rural
    water programs.
        The budget includes $64 million in fiscal year 2010 funding
    for water systems to deliver surface water to Indian and non-
    Indian communities in the Great Plains Region. These projects
    provide good quality water to rural areas where existing water
    supplies are either nonexistent or of very poor quality. The
    request includes funding for seven ongoing authorized rural
    water projects and funding for the O&M requirements that
    Reclamation has for the tribal water features is $15.3 million
    and about $49 million supports the administration's commitment
    to completing construction of the Mni Wiconi Project in South
    Dakota, the Garrison Unit in North Dakota, Lewis and Clark in
    South Dakota, Iowa, and Minnesota, Fort Peck in Montana, and
    for the first time we have included a budget request for
    Perkins County in South Dakota, Jicarilla Apache Project in New
    Mexico, and the North Central Montana Rocky Boys Project in
    Montana.
        Overall, the request for rural water projects will continue
    the substantial investment made in recent years, including the
    $200 million in Recovery Act funding that Reclamation is
    currently in the process of allocating.
        The fiscal year 2010 budget also requests $2.3 million for
    the establishment of the formal rural water supply program
    required under title 1 of the Rural Water Supply Act of 2006
    and we hope to get that program up and going by fall of this
    year.
        The third area is the environmental and ecosystem
    restoration programs that Reclamation has. Reclamation works to
    meet the increasing water demands of the West while protecting
    the environment. Reclamation has an established role in
    restoring aquatic habitat that is impacted by historic
    development and is working on a large number of restoration
    programs that are necessary to maintain compliance with the
    Endangered Species Act.
        Accordingly, the 2010 budget continues focus on these
    challenges, including increases for several programs addressing
    environmental issues. Some examples include a $15 million
    request for the Red Bluff Pumping Plant, which is part of the
    Central Valley Project in California. Additionally, you will
    see an increase in the Lower Colorado River Operations Program
    to fund the multi-species conservation program which is key to
    ESA compliance in the lower Colorado River.
        Finally, as I mentioned, I want to talk a little bit about
    Secretary Salazar's water conservation initiative. It's one of
    the most significant and exciting elements of our fiscal year
    2010 budget. In fiscal year 2010, Reclamation will implement
    the water conservation initiative to expand and stretch limited
    water supplies in the West, to reduce conflict, facilitate
    solutions to complex water issues, and meet the growing needs
    of municipalities, the environment, and agriculture.
        The fiscal year 2010 budget provides $46 million in funding
    for the water conservation initiative. This includes a $26
    million increase in challenge grants for fiscal year 2010 and
    Reclamation will use these--will provide these grants on a cost
    shared basis in the areas--to facilitate water transfers
    between willing sellers and buyers, water efficiency and
    conservation projects, and projects that improve water
    management by increasing operational flexibility in our
    systems, and finally, pilot and demonstration projects that
    demonstrate the viability of treating and using brackish ground
    water, sea water, or impaired waters within a specific locale.
        Within the funding requested in 2010, Reclamation will be
    able to fund at least 110 new water conservation projects.
    These projects will be required to be completed within 2 years
    from the date of funding and therefore will have a near-term
    impact on water savings. The initiative also incorporates the
    basin study program, in which Reclamation will work with State
    and local partners to initiate comprehensive water supply and
    demand studies in the West.
        A final piece for the water conservation initiative is
    funding for the title XVI Water Reclamation and Reuse Program.
    The funding requested in the 2010 budget is in addition to a
    substantial amount of funding provided by Congress in the
    Recovery Act.

                               PREPARED STATEMENT

        Mr. Chairman, please allow me to express my sincere
    appreciation for the continued support that this subcommittee
    has provided Reclamation.
        This completes my statement. I'll be happy to answer
    questions at the appropriate time.
        [The statement follows:]

                    Prepared Statement of Michael L. Connor

        Thank you, Mr. Chairman, Mr. Bennett and members of the
    subcommittee, for the opportunity to appear before you in support of
    the President's fiscal year 2010 budget request for the Bureau of
    Reclamation. With me today is Bob Wolf, Director of Program and Budget.
        I appreciate the time and consideration this subcommittee gives to
    reviewing and understanding Reclamation's budget and its support for
    the program. Reclamation works hard to prioritize and define our
    program in a manner that serves the best interest of the public and
    those who rely on Reclamation for their water and power.
        Our fiscal year 2010 request continues support to activities that
    deliver water and generate hydropower, consistent with applicable State
    and Federal law, in an environmentally responsible and cost-effective
    manner.
        The proposed funding will allocate funds to projects and programs
    based on objective and performance-based criteria to most efficiently
    implement Reclamation's programs and its management responsibilities
    for the water and power infrastructure in the West. The President's
    budget request emphasizes the following principle: enhancing management
    of our water infrastructure and programs in the West by eliminating
    program redundancies, leveraging partnerships with our western
    stakeholders and maximizing opportunities for competitive processes.
        The fiscal year 2010 request for Reclamation totals $1.0 billion in
    gross budget authority. This takes into consideration the effects of
    the legislation that, beginning in fiscal year 2010, redirects an
    estimated $5.6 million for Friant surcharges from the Central Valley
    Project Restoration fund to the San Joaquin River Restoration Fund. The
    request also is partially offset by discretionary receipts in the
    Central Valley Project Restoration Fund of $35.1 million. The resulting
    net discretionary request for Reclamation is $985.6 million.

                          WATER AND RELATED RESOURCES

        The fiscal year 2010 request for Water and Related Resources is
    $893.1 million. The request for Water and Related Resources includes a
    total of $465.9 million for water and energy, land, and fish and
    wildlife resource management activities (which provides for
    construction and management of Reclamation lands, and actions to
    address the impacts of Reclamation projects on fish and wildlife). The
    request also includes $427.2 million for facility operations,
    maintenance, and rehabilitation activities which is used to ensure
    sound and safe ongoing operations. Adequate funding for facility
    operations, maintenance, and rehabilitation continues to be one of
    Reclamation's highest priorities. Reclamation continues to work closely
    with water users and other stakeholders to ensure that available funds
    are used effectively. These funds are used to allow the timely and
    effective delivery of project benefits; ensure the reliability and
    operational readiness of Reclamation's dams, reservoirs, power plants,
    and distribution systems; and identify, plan, and implement dam safety
    corrective actions and site security improvements.
    Highlights of the Fiscal Year 2010 Request for Water and Related
            Resources
        I would like to share with the subcommittee several highlights of
    the Reclamation budget, including one of the most significant and
    exciting elements of our 2010 request, the Water Conservation
    Initiative. In fiscal year 2010, Reclamation will implement the Water
    Conservation Initiative focused on expanding and stretching limited
    water supplies in the West to reduce conflict, facilitate solutions to
    complex water issues, and to meet the growing needs of expanding
    municipalities, the environment, and agriculture.
        Water Conservation Initiative (WCI) ($46.0 million).--Of this
    amount, $37.2 million appears as the Water Conservation Initiative line
    item. The remaining $8.8 million is funded in specific title XVI water
    reclamation and reuse projects.
        The American West is now the fastest growing region of the country
    and faces serious water challenges. Competition for finite water
    supplies, including water for environmental needs, is increasing as the
    need for water continues to grow. At the same time, extended droughts
    are impacting water availability and climate change is likely to
    compound the situation. With an increase of $26 million in fiscal year
    2010, Reclamation will help address these concerns by providing cost-
    shared grants, on a competitive basis, through the Water Conservation
    Initiative. The Water Conservation Challenge Grants (previously Water
    for America Challenge Grants) provide the following types of on-the-
    ground projects: (1) Water marketing projects with willing sellers and
    buyers, including water banks that transfer water to other uses to meet
    critical needs for water supplies; (2) water efficiency and
    conservation projects that allow users to decrease diversions and to
    use or transfer the water saved; (3) projects that improve water
    management by increasing operational flexibility (constructing aquifer
    recharge facilities or making system optimization and management
    improvements); and (4) pilot and demonstration projects that
    demonstrate the technical and economic viability of treating and using
    brackish groundwater, seawater, or impaired waters within a specific
    locale. All grant proposals will be evaluated using criteria that give
    priority to projects that save the most water, facilitate transfers to
    new uses, address endangered species and other environmental issues,
    improve energy efficiency, conserve Reclamation project water, and
    exceed the minimum 50 percent non-Federal cost-share requirement.
        With the funding requested in fiscal year 2010, Reclamation will be
    able to fund at least 110 new water conservation projects. The WCI
    competitive grant projects will be required to be completed within 2
    years from the date of funding. As a result, projects funded under the
    WCI will have a near-term impact on water savings. Reclamation believes
    that water conservation, use of markets, and improved efficiency are
    crucial elements of any plan to address western water issues. With the
    WCI grants, Reclamation will take an important step towards increasing
    conservation and efficiency on a West-wide basis.
        The WCI also incorporates the Basin Study Program in which
    Reclamation will work with State and local partners to initiate
    comprehensive water supply and demand studies in the West. Each study
    includes state of the art projections of future water supply and demand
    on a basin-wide scale; analysis of how the basin's existing water and
    power operations and infrastructure will perform in the face of
    changing water realities; and recommendations on how to optimize
    operations and infrastructure in the basin to supply adequate water in
    the future.
        The title XVI, Water Reclamation and Reuse Program also contributes
    to water conservation in the Western United States, and is included in
    the WCI. The request includes $9.0 million to make available cost-
    shared funding for ongoing title XVI construction projects, research
    activities, and feasibility studies ($8.8 million directly supports
    named projects, $200,000 is used by the Commissioner's Office for
    administrative support of the program). Title XVI projects develop and
    supplement urban and irrigation water supplies through water reuse,
    thereby improving efficiency, providing flexibility during water
    shortages, and diversifying the water supply. There is also $3.0
    million for water reclamation funded in the California Bay-Delta
    program under the Water Use Efficiency activity.
        Other significant programs and highlights include:
        Animas-La Plata in Colorado and New Mexico ($54.2 million).--The
    fiscal year 2010 President's budget request will continue
    implementation of the Colorado Ute Settlement Act. This funding will
    provide for directional drilling and pipeline construction of the
    Navajo Nation Municipal Pipeline, the first fill of Lake Nighthorse,
    and construction of County Road 211 Relocation and other required
    relocations. In addition to construction funding, this request includes
    funding for operation and maintenance of improvements for wetland and
    wildlife mitigation lands associated with the project.
        Columbia/Snake River Salmon Recovery in Idaho, Oregon, Montana, and
    Washington ($18.0 million).--This program implements actions under both
    the 2000 Biological Opinion issued by FWS and section 7(a)(2) of the
    Endangered Species Act as required by the 2008 Biological Opinion
    issued in May 2008 by the National Marine Fisheries Services. The
    fiscal year 2010 President's budget request will enable Reclamation to
    address the requirements in the 2008 Biological Opinion for actions to
    enhance tributary spawning and rearing habitat to offset the effects of
    the Federal Columbia River Power System (FCRPS) hydro system operations
    on salmon and steelhead survival. It also will fund Reclamation's
    involvement with non-Federal parties located in Idaho, Oregon, and
    Washington to modify screens and remove instream diversion-related
    barriers. As required by the 2008 FCRPS Biological Opinion, it will
    fund Reclamation's participation in the implementation of real-time
    operational measures, system flood control, and Columbia Basin Project
    actions associated with ESA listed species.
        Klamath Project in Oregon and California ($25.0 million).--The
    fiscal year 2010 President's budget request will continue funding for
    Reclamation to collaborate with other Federal and State agencies,
    tribes and the public to develop a basin-wide recovery plan that
    addresses water supply, water quality, fish habitat, and fish
    populations.
        Klamath Dam Removal Study ($2.0 million).--The fiscal year 2010
    President's budget request includes $2.0 million for the Bureau of
    Reclamation and $2 million for the Fish and Wildlife Service (FWS) to
    further assess the costs and benefits of removing four privately-owned
    hydroelectric dams on the Lower Klamath River below the Federal
    project. The request will fund the study costs associated with
    preparing National Environmental Policy Act documentation. The FWS also
    has $2.0 million in its request to support these studies. These studies
    will be conducted by Reclamation and FWS in coordination with BLM and
    BIA, the U.S. Forest Service, and the National Oceanic and Atmospheric
    Administration's National Marine Fisheries Service. Reclamation also
    allocated $4.0 million in ARRA funding for these studies.
        Lower Colorado River Operations Program in California, Arizona and
    Nevada ($21.4 million).--The fiscal year 2010 President's budget
    request will provide funds for the work necessary to carry out the
    Secretary's responsibilities as water master of the lower Colorado
    River, including the development of the Shortage Guidelines and
    reservoir management strategies during low reservoir conditions. The
    fiscal year 2010 request funds measures under the multi-species
    conservation program to provide long-term Endangered Species Act
    compliance for lower Colorado River operations for both Federal and
    non-Federal purposes.
        Middle Rio Grande in New Mexico ($23.8 million).--The fiscal year
    2010 President's budget request will continue funding for endangered
    species activities and Reclamation's participation in the Middle Rio
    Grande Endangered Species Act Collaborative Program as well as repair
    of priority river maintenance sites.
        Platte River Endangered Species Recovery Program ($12.7 million).--
    The President's fiscal year 2010 budget request for the Platte River
    Recovery Implementation Program is $12.7 million. The agreement for the
    program was signed by then Secretary Kempthorne and the Governors of
    Nebraska, Colorado and Wyoming in late 2006. Platte River habitat is
    essential to the recovery of the whooping crane, interior least tern,
    piping plover, and pallid sturgeon (all threatened or endangered
    species).
        Public Law 110-229 authorized the Secretary of the Interior,
    through Reclamation, and in partnership with the States of Wyoming,
    Nebraska, and Colorado, other Federal agencies, and other non-Federal
    entities to participate in the implementation of the Program for
    endangered species in the Central and Lower Plate River Basin and to
    modify Reclamation's Pathfinder Dam. No Federal appropriations are
    required to modify the Pathfinder Dam. Program activities include the
    acquisition of lands and water and contracting for habitat restoration
    projects.
        Research & Development ($12.9 million).--Reclamation's research and
    development program has two focus areas for fiscal year 2010: (1)
    Science and Technology (S&T) ($9.2 million) which includes funding for
    the development of new solutions and technologies which respond to
    Reclamation's operational needs with priorities in fiscal year 2010 for
    issues related to climate change and quagga mussels; and (2) the
    Desalination and Water Purification program ($3.7 million) which
    conducts desalination research, development and demonstrations for the
    purpose of converting unusable waters into useable water supplies. The
    research is conducted through competitive, merit-based cooperative
    agreements on a cost-shared basis.
        Rural Water Projects--Ongoing ($64.0 million).--This request
    includes funding for seven ongoing authorized rural water projects. The
    first priority for funding rural water projects is the required
    operations and maintenance component, which is $15.3 million for 2010.
    The budget also includes $48.7 million to support the administration's
    commitment to complete construction of ongoing rural water projects
    including ongoing municipal, rural and industrial systems for Mni
    Wiconi and Perkins County (SD), the rural water component of the
    Garrison Diversion Unit (ND), Fort Peck (MT), Jicarilla Apache
    Reservation (NM), Rocky Boys (MT), Perkins County and Lewis and Clark
    (SD, IA, MN). For the construction component, Reclamation allocated
    funding based on objective criteria that gave priority to projects
    nearest to completion and projects that serve tribal needs.
        Rural Water Program Development ($2.3 million).--On December 22,
    2006, the Rural Water Supply Act of 2006 was signed. The fiscal year
    2010 President's budget requests $2.3 million for title I of the
    statute that requires the Secretary to establish a formal rural water
    supply program for rural water projects in the 17 Western States. The
    act requires the establishment of programmatic and eligibility criteria
    for the rural water program along with other reporting requirements and
    criteria for appraisal and feasibility studies, and to establish clear
    guidelines for project development to help meet the water supply needs.
    Reclamation anticipates completing the final rule and beginning program
    implementation in late 2009.
        Savage Rapids in Oregon ($1.2 million).--The fiscal year 2010
    President's budget request will provide funds for completing the
    removal of the main portion of the Savage Rapids Dam to allow the
    Grants Pass Irrigation District to comply with a Federal court consent
    decree requiring the District to cease irrigation diversions. The
    project is expected to be completed in 2010. Removal of this irrigation
    diversion dam and the installation of pumping facilities allows the
    local farming community to continue irrigated agriculture and remove a
    migration barrier for the threatened Southern Oregon and Northern
    California coho salmon.
        Site Security ($28.9 million).--The President's 2010 budget request
    for site security helps to ensure the safety and security of the
    public, Reclamation's employees and key facilities. Funding will
    support all aspects of Bureau-wide security efforts including physical
    security upgrades at high risk critical assets, law enforcement, risk
    and threat analysis, personnel security, information security, security
    risk assessments and security-related studies, and guards and patrols.
        Under the provisions of section 513 of the Consolidated Natural
    Resources Act of 2008, Reclamation will collect $18.9 million in
    security-related operation and maintenance costs in 2010. Approximately
    60 percent of this amount is reimbursable through up-front revenues.
    Approximately 40 percent of this amount is appropriated and then
    reimbursed to projects through the normal operations and maintenance
    cost allocation process.
        Safety of Dams ($101.9 million).--The President's budget allows
    Reclamation to ensure that safety and reliability of Reclamation dams
    is one of the Bureau's highest priorities. The Dam Safety Program is
    critical to effectively manage risks to the downstream public,
    property, project, and natural resources. Of the budget request of
    $101.9 million, $50 million is for the Folsom Dam (CA), which has been
    identified as the Bureau's highest safety priority. Dam safety
    modifications, within the limits of enacted funding and latest
    information on risk, are planned to begin in 2010 for Glendo Dam (WY)
    and AR Bowman Dam (OR).

                           POLICY AND ADMINISTRATION

        The $61.2 million request in fiscal year 2010 funds the
    development, evaluation, and implementation of Reclamation-wide policy,
    rules, and regulations, including actions under the Government
    Performance and Results Act. These funds are also used for management
    and performance functions that are not chargeable to specific projects
    and required for ongoing Commissioner's activities.

                    CENTRAL VALLEY PROJECT RESTORATION FUND

        This fund was established by the Central Valley Project Improvement
    Act, title XXXIV of Public Law 102-575, October 30, 1992. The request
    of $35.4 million is expected to be offset by discretionary receipts
    totaling $35.1 million, which is the maximum amount that can be
    collected from project beneficiaries under provisions of section
    3407(d) of the act. The discretionary receipts are adjusted on an
    annual basis to maintain payments totaling $30.0 million (October 1992
    price levels) on a 3-year rolling average basis.
        The CVPRF request is a net of $35.4 million. This excludes a
    redirection of an estimated $5.6 million collected from the Central
    Valley Project Friant Division water users to the new San Joaquin River
    Restoration Fund beginning in fiscal year 2010 as authorized in Public
    Law 111-11, Omnibus Public Land Management Act of 2009. Previously,
    these funds went into the CVPRF as outlined in the Reclamation Projects
    Authorization and Adjustments Act of 1992, title XXXIV of Public Law
    102-575, section 3406(c)(1). Under the Settlement Act, approximately
    $15.9 million per year of payments from the Central Valley Project,
    Friant Division water users are deposited in the Fund and available
    without further appropriations to implement the provisions of the
    settlement. These funds will be used for habitat restoration,
    improvement and acquisition, and other fish and wildlife restoration
    activities in the Central Valley Project area of California.

                       SAN JOAQUIN RIVER RESTORATION FUND

        As referenced above, funding in fiscal year 2010 will be used to
    continue planning, engineering, environmental compliance, fisheries
    management, water operations, and public involvement activities related
    to the Restoration and Water Management goals in the Settlement. No
    funds are requested beyond the $15.9 million that is available in
    mandatory spending.

                 CALIFORNIA BAY-DELTA RESTORATION FUND (CALFED)

        Title I of Public Law 108-361, titled the Calfed Bay-Delta
    Authorization Act, was signed by the President on October 25, 2004. The
    act authorized $389 million in Federal appropriations over the period
    of fiscal year 2005 through fiscal year 2010. For fiscal year 2010,
    $31.0 million is requested to enable Reclamation to advance its
    commitments under the CALFED Record of Decision to resolve water
    resource conflicts in the CALFED solution area. Funds will be used for
    water storage studies, the conveyance program, water recycling and
    conservation, the science program, water quality assurance
    investigations, ecosystem restoration projects and oversight functions
    to ensure program balance and integration.

                      FISCAL YEAR 2010 PLANNED ACTIVITIES

        Reclamation's fiscal year 2010 priority goals are directly related
    to fulfilling contractual requests to deliver water and power. These
    include addressing a range of other water supply needs in the West,
    playing a significant role in restoring and protecting freshwater
    ecosystems consistent with applicable State and Federal law, and
    enhancing management of our water infrastructure while mitigating for
    any harmful environmental effects. Reclamation will deliver roughly 28
    million acre-feet of water to meet contractual obligations while
    addressing other resource needs (for example, fish and wildlife
    habitat, environmental enhancement, recreation, and Native American
    trust responsibilities).
        Reclamation will maintain dams and associated facilities in good
    condition to ensure the reliable delivery of water. Reclamation will
    maintain a forced outage average of 2.20 that is lower than the
    industry average for similar units to ensure reliable delivery of
    power. Reclamation will reduce salinity by setting a goal of preventing
    an additional 12,700 tons of salt from entering the water ways.
        Moreover, the fiscal year 2010 budget request demonstrates
    Reclamation's commitment in meeting the water and power needs of the
    West in a fiscally responsible manner. This budget continues
    Reclamation's emphasis on managing those valuable public resources.
    Reclamation is committed to working with its customers, States, tribes,
    and other stakeholders to find ways to balance and provide for the mix
    of water resource needs in 2010 and beyond.
        In addition, Reclamation, with funds from the American Recovery and
    Reinvestment Act of 2009, will undertake a variety of projects to meet
    future water supply needs, improve infrastructure reliability and
    safety, and restore ecosystems.

                                   CONCLUSION

        Mr. Chairman, please allow me to express my sincere appreciation
    for the continued support that this subcommittee has provided
    Reclamation. This completes my statement. I would be happy to answer
    any questions that you may have at this time.

                                 BUDGET PROCESS

        Senator Dorgan. Commissioner Connor, thank you very much.
        Mr. Salt, let me ask you why it took 5 weeks from the time
    that the President's budget was released to us getting details
    of that budget? What was going on in the background there?
        Mr. Salt. Sir, both the Recovery Act and the budget being
    so close together, there were a number of efforts by the
    administration to look at the policies that had existed, try
    and come up with a review of those policies, apply them in some
    appropriate way, first in the bill and then, based upon those
    sets of decisions, then to go and make the appropriate
    adjustments in the budget.
        I think as we were doing all of that some of the projects
    changed, some of the numbers changed. As we then went to adjust
    our documentation, it took us certainly longer than we had
    hoped, and I apologize for the delay.
        Senator Dorgan. I'm trying to understand on both the
    economic recovery plan and also this budget what role OMB
    played in the delays, because it seems to me that we have had
    very little time to review what you have submitted in detail.
    We've been put in that position twice in the last 4 years.
        You know, there are lots of questions about how we can get
    information about the metrics that you used to evaluate what
    funding you recommend. I said at the start, the President has
    recommended a lot of earmark funding here. It was true with the
    previous president. Presidents recommend their earmark funding.
    How are those earmarks decided upon? Who makes the judgments
    about here are the things we're going to earmark in our request
    to the Congress?
        Mr. Salt. Sir, as you pointed out in your opening comment,
    it is the President's budget. So obviously at some level the
    President is the one who submits the budget. I am here on his
    behalf presenting this budget. So I take full responsibility
    for the budget that is in front of you.
        I would say as a new person learning how this works, we
    receive broad guidance from OMB. We then apply that guidance as
    we assemble our budget. As I said in my testimony, our focus is
    on trying to ensure that we are recommending the highest
    priority projects. We are given a budget envelope that we fit
    within and it's trying then to recommend the highest priority
    projects.
        Senator Dorgan. Let me tell you why I'm asking the
    question. My sense is you have some sort of evaluation down
    there using certain metrics and models by which you decide
    here's what we'd like to fund. Then I assume it goes, as it has
    in the previous administration, down to the Office of
    Management and Budget and they say, well, here's our
    priorities, and they send it back to you. My understanding is
    these things bounce back and forth. I'm trying to understand
    how it works.
        But let me ask you a couple of specific questions. For
    example, the contract for the Ozark-Jeta Taylor Powerplant is
    not funded for completion in this budget. It's a project that
    you have had in your budget in prior years. I don't understand,
    for example, why you wouldn't fund this to completion or if
    you've changed your mind about the project.
        Mr. Salt. As part of the criteria, we used benefit to cost
    ratio. The sequence of priorities basically was that dam safety
    projects were put at the top of the list, high priority
    projects justified by their economic benefits were arrayed in
    order of their benefit to cost ratio, and in this case the
    Ozark-Jeta Project fell below the other priority projects that
    we had recommended.
        Senator Dorgan. Again, I don't have any particular
    attachment to this project. It just seems to me like if it fit
    some sort of criteria last year saying, it's a project we're
    building, we're going to keep funding it, and now you say,
    except this year we've decided that we don't want to keep
    funding it. I don't understand what the metrics are by which
    one makes that decision. We probably need to know more about
    that.

                           ENVIRONMENTAL RESTORATION

        A question about the Everglades funding, as I calculate
    what you're doing, the Everglades request is $214 million.
    We've spent I think about $1.3 billion on various components of
    Everglades restoration. I'm supportive of restoration projects
    in the Everglades, but the $214 million, that's in addition to
    the $123 million that was in the omnibus, and more than $100
    million you've proposed in the Recovery Act. So that's about
    $440 million in just a matter of months, intended to be
    utilized no later than September 30, 2010.
        I question whether that is going to be able to be done. In
    addition, the Everglades takes about 13 percent of the Corps
    construction budget, and then the next highest funded project
    is the Herbert Hoover Dike, also in Florida, which takes up
    about 8 percent of the construction funds. That means more than
    one-fifth of all the construction money for the Corps is going
    into these two Florida projects.
        I'm not talking about the merits of the projects, but I am
    saying that there are projects I assume in New York and
    California and Missouri and Utah and elsewhere that would
    probably say, how is it that one-fifth of the funding is going
    to be destined in Corps construction to the State of Florida?
        Mr. Salt. Sir, you've raised up a number of important
    issues. As you know, the Everglades restoration is largely
    funded on a 50-50 basis. Much of the work we're talking about
    here are projects that we've been working on for a long time. I
    think the Corps and our partners have been criticized for the
    lack of achieving any actual restoration benefits. So the
    administration is aware of those criticisms and is trying to
    move out with projects that would allow for actual on-the-
    ground restoration.
        The recently authorized--the recent WRDA authorized a
    number of projects and what you're seeing in this budget is the
    startup of construction for these recently authorized projects
    that would allow for the progress that people are expecting.
        Senator Dorgan. And those are new starts?
        Mr. Salt. Sir, they are receiving construction funding for
    those elements for the first time, yes, sir.
        Senator Dorgan. General Van Antwerp, you've stated that 11
    percent of the total budget, fiscal year 2010 budget, is for
    environmental restoration. How much of the construction budget
    is set aside for environmental restoration?
        General Van Antwerp. I'm not certain of that figure. I'm
    going to have to get back with you on that number, of the
    actual construction projects. We don't have it broken down like
    that.
        Senator Dorgan. Would you break that down for us, please?
        General Van Antwerp. Yes, sir.
        Senator Dorgan. I have a question of the Bureau, but I want
    to commend the Corps and just say we've been through some
    significant flood fights this year. When you go into a flood
    fight you want the Corps on your side, and the men and women of
    the Corps who came to community after community to be engaged
    in those fights, we should not let the moment pass without
    saying thank you to the Corps and to the organization that
    helps make this happen.
        General Van Antwerp. Thank you, Senator.

                               PROJECT EVALUATION

        Senator Dorgan. In the Bureau of Reclamation, there are a
    number of projects in the fiscal year 2009 Energy and Water Act
    that were not included in the fiscal year 2010 budget request.
    Again, kind of what I asked the Corps: What's the reason for
    that? Have you changed your mind about projects that you
    previously thought worthy and now perhaps think are less
    worthy?
        Mr. Connor. Mr. Chairman, I think that what we're doing
    there is operating within the parameters of the overall budget
    number that we were given. We look at the budget and we
    allocate a set of priorities maintaining the existing
    infrastructure. Then we look at dam safety and security. Then
    we look at ongoing construction activities. Then finally we
    have to deal with our ESA compliance items.
        I recognize that within that ongoing construction activity
    we do have actions that have been undertaken with write-in
    funding on a lot of these rural water projects. But when we
    look at the kind of requirements with respect to maintaining
    that infrastructure, the safety and compliance activities so
    that we can keep delivering water, then we're left with a
    certain amount of money within that budget allocation that
    we're provided. That's where we have to make some tough
    choices.
        Senator Dorgan. So that's where your advice to the
    committee about how you made those choices would be helpful,
    that you force-rank them. I use the term ``earmark.'' You
    earmark your funding choices and force-rank them. We're
    wondering because of that ranking, are some of the things that
    you have previously funded now judged to be less worthy?
        So we'll submit a list of questions to you, but it would be
    helpful to us if you would submit at least a judgment about
    those that you have previously funded and are not now funding,
    to say, in addition to being short of money, we felt this
    ranked below the following, when it did not perhaps the year
    before or the year before that it did rank below another
    project.
        We're just trying to understand what you're doing and what
    your assessment is of the various projects related one to
    another.
        I have taken more than my share of time. I'm going to be
    submitting a list of questions to the Corps and the Bureau. We
    appreciate your being here.
        I'll call on the ranking member, Senator Bennett.
        Senator Bennett. I'll yield.
        Senator Dorgan. Then Senator Bond.
        Senator Bennett. Senator Tester and I were up with the
    Secretary. So you go ahead.
        Senator Dorgan. Senator Bond.

                    STATEMENT OF SENATOR CHRISTOPHER S. BOND

        Senator Bond. Sorry I missed that fun.
        General, you mentioned the tremendous O&M costs for our
    operating locks, locks some 80 years old that were built for 50
    years. Many of us believe that they should be replaced and
    expanded for tremendous economic, energy, and environmental
    benefits. But of course, OMB does not agree.
        The chairman rightly pointed out, and he put his finger on
    the problem with earmarks by the administration. My experience
    in the few years I've been here is that the ultimate decisions
    on administration earmarks are made somewhere in the bowels of
    OMB by people we don't know, we don't see or even hear from
    directly, and our constituents can't communicate with.
        When one of us in Congress changes one of these priorities,
    we stand up for the specific item. We appropriately take
    responsibility and answer questions about them. I am one who
    believes that that is a very fair and not sufficiently
    exercised priority.

                                 MISSOURI RIVER

        So going to one of the earmarks, the Corps is currently
    responsible under the Clean Water Act to ensure navigable
    waters, such as the Missouri River, are not polluted. A side
    note: I came from EPW, which is looking for a vast expansion in
    the Corps's responsibility that will require a huge number of
    people to regulate every puddle and pond that is not now
    navigable.
        But the administration budget includes $70 million for the
    Missouri River Fish and Wildlife Recovery Project. This is the
    construction of side channels and shallow water habitats across
    farm land adjacent to the Missouri River, for restoration
    activities, primarily for the habitat of the pallid sturgeon.
    Some are already constructed.
        Now, here's the problem. According to the Corps's
    estimates, construction of these projects will result in
    dumping 540 million tons of farm land soil directly into the
    Missouri River. Thus these projects will contribute more than
    350,000 tons of phosphorus to the Missouri River. These
    projects alone will supply 10 times what the EPA Task Force on
    Hypoxia determined to be the annual load of phosphorus of the
    entire Missouri River Basin.
        Scientists believe that phosphorus is a major contributing
    factor in hypoxia in the gulf. In Missouri, the Clean Water
    Commission has vigorously opposed this effort. Missouri
    citizens and farmers have implemented a $41 million soil and
    water conservation tax upon themselves, and Missouri farmers
    pay an additional $27 million of their money to cost-share to
    keep this soil out of the river because of their concern of
    negative environmental impacts.
        Given that the estimated cleanup cost to remove the
    phosphorus that the Corps is planning to put in the Missouri
    River in Missouri cleaning up the shallow water habitat
    projects will be $18 billion, how wise is dumping that soil in
    the Missouri River?
        General Van Antwerp. You have a lot of great facts, Senator
    Bond. I think as we do our section 108 study of the Missouri,
    we need to look further into those issues that you just raised
    right there. As far as the wisdom of that, I've got to really
    dig into the contents of that study. I understand what you're
    saying.
        Senator Bond. I'd like to be able to have a discussion with
    the genius who made that decision. If somebody believes that
    that is still a wise decision, it would be very nice, Mr.
    Chairman, if we could chat with that individual here in a
    hearing.
        These side channel projects are supposed to develop a
    habitat for the pallid sturgeon. I'd like to know how the
    projects were evaluated and justified. Do we know that we're
    getting the best value of our $70 million? I know the U.S.
    Geological Survey has done additional tests on the pallid
    sturgeon and believes there may be some other, more fruitful
    ways of encouraging the reproduction of pallid sturgeon. We
    are, through a Conservation Commission, engaging in a
    significant breeding program for pallid sturgeon so our
    favorite little fish will remain there.
        I would like to know what you have found out about the best
    way to stimulate the sex life of the pallid sturgeon. That
    would be helpful.

                             FLOOD RELIEF AUTHORITY

        Finally, we're very much concerned that a recent
    announcement by the administration to get FEMA out of the
    ability to help fight floods, remove debris, de-water, and
    assist in emergency efforts. There are many small communities
    in my State and I imagine in all States where our communities
    could be left high and dry or, worse, low and wet in the
    darkest hour.
        Does the Corps have any authorization to step forward in
    the gap left by FEMA's failure to deal with these natural
    disasters?
        General Van Antwerp. We do--we have a number of our own
    authorities under Public Law 84-99, which allows us to come in
    and flood fight and do coastal emergencies and those kinds of
    things separate from the FEMA. When we work for FEMA, we work
    under Emergency Support Function 3, which is for debris removal
    and ice and water and the blue roofs. So those issues are under
    FEMA when we respond to a disaster.
        Senator Bond. But you can handle--not just coastal, but you
    can handle the inland disasters that might strike the Dakotas,
    Utah, and Montana?
        General Van Antwerp. Right, much like the Midwest floods or
    even the ice storms of Kentucky this year. We're able to
    respond if it is a levee that's affected, we can come in under
    our own authority.
        Senator Bond. What tests if it's not a levee? What kind of
    damage do you have to have for you to move in?
        General Van Antwerp. If it's not a flood or a levee
    situation----
        Senator Bond. If it's a flood, you can take it?
        General Van Antwerp. If it's a flood, we're allowed to
    flood fight that with the local community. If a levee is judged
    that it is entitled to 84-99 funds, we can come in and build
    HESCO barriers, help increase the height of that levee, et
    cetera.
        Senator Bond. Thank you very much, General. We appreciate
    the good work you do. You're a vitally important partner and
    we're grateful for it. We just have some serious concerns about
    some of the things you've been directed to do.
        Thank you, sir.
        Senator Dorgan. Senator Bond, thank you.
        I should point out that if those in the audience observe a
    different look here on the dais, it's Seersucker Thursday. Some
    of us can only afford one suit, but our colleagues look pretty
    spiffy today and we're glad to see them here.
        Senator Bennett.
        Senator Bennett. Once I bought it for the first Seersucker
    Thursday, I was determined I was going to keep wearing it year
    after year because I'm not going to pay $150 for a suit and
    only wear it once. So that's where we are.
        Thank you, Mr. Chairman.

                        OBJECTIVE PERFORMANCE GUIDELINES

        Mr. Salt, your testimony says that the Corps is applying
    objective performance guidelines to the competing projects. Can
    you explain what the specific guidelines are?
        Mr. Salt. Sir, there are different guidelines depending on
    the business line that we're talking about. Our highest
    priority is dam safety. The Corps does a risk analysis, taking
    into consideration the condition of the dam and the probability
    that there would be a serious risk to public safety, and based
    on that criteria those projects that are deemed a serious risk
    are moved to the top of our list.
        For projects that are justified by the economic benefits,
    it's the benefit to cost ratio that is used. So we take the
    project portfolio that we have and we apply our benefit to cost
    ratio criteria.
        For our navigation projects, it's a combination of the
    state of the navigation channel, the degree to which it's
    silted in and the additional work, dredging or other repairs,
    which need to be done. The Chief of Engineers, General Van
    Antwerp, mentioned the navigation locks and the need to pay
    attention to the important maintenance of our navigation locks.
    That analysis is done based on a combination of the condition
    of the particular project and the impact of not doing the
    maintenance in that year. Again, a similar risk-based analysis
    is used for those projects.
        Senator Bennett. Do you apply those same standards to
    environmental infrastructure projects, the risk, economics, and
    navigation?
        Mr. Salt. Sir, for the environmental restoration, those
    efforts are prioritized basically by the administration as our
    highest priority environmental restoration efforts, and there
    are a number of large environmental restoration efforts. In
    2007, Congress directed the Corps to review its principles and
    guidelines, which really doesn't give the administration's
    national policy for evaluating projects. It doesn't really give
    any guidance as to how to deal with the environmental issue
    that you're talking about.
        We expect within a few months to have the draft proposed--a
    revised draft of the principles and guidelines that we're
    required to give to the National Academy of Sciences. It's in
    that document that we're looking at how to quantify non-
    monetary benefits in a way that would allow for a more
    objective set of criteria for dealing with environmental
    restoration projects.
        Senator Bennett. Do you ever have a conflict where you say
    if we do this environmental infrastructure it's in fact going
    to increase the risk?
        Mr. Salt. I'm not aware of any--when I talk about the
    environmental, I'm talking about the environmental restoration
    projects. The environmental infrastructure is basically the
    sewage treatment and those sorts of projects, and I would say
    those are not supported by the administration.
        But for the environmental restoration projects, I'm not
    aware of any--those that I'm aware of in Florida--I've been
    working in Florida--we maintained existing authorizations and
    in fact the projects were formulated so that there was no harm
    done to flood or water supply interests. So I would say as a
    matter of policy that would be my expectation as it relates to
    environmental restoration projects.
        Senator Bennett. Okay.

                               DROUGHT ASSISTANCE

        Ms. Archuleta, the Bureau has budgeted $500,000 for drought
    assistance in fiscal 2010. Do you think that's sufficient?
        Ms. Archuleta. Well, Senator, certainly it's difficult to
    know what our drought conditions are going to be. We work
    collaboratively with NOAA. It's tough for us to predict what
    the weather conditions are going to look like in the coming
    year. We're hopeful and certainly we'll work as closely with
    that budget as we can.
        Senator Bennett. The Central Utah Project. I'm sure it
    comes as no surprise that I have an interest in that. The
    budget is flat compared to fiscal 2009. Obviously you think
    that's sufficient to meet the progress. But what is your
    funding, total funding capability for CUPCA in 2010?
        Ms. Archuleta. Well, actually, if I may, I'd like to turn
    it over to Mr. Murray, who's here, who knows the project, as
    you know, very well.
        Senator Bennett. Okay, good.
        Mr. Murray. Mr. Chairman, Senator Bennett----
        Senator Bennett. Would you identify yourself?
        Mr. Murray. Yes, Reed Murray. I'm the Program Director of
    the Central Utah Project.
        First of all, I'd like to thank the subcommittee for your
    support over the years of the Central Utah Project. As you
    know, it's the largest water project ever undertaken by the
    State. We do appreciate your support.
        Your question was the capability of the project.
        Senator Bennett. Right.
        Mr. Murray. Well, first of all, we do support the
    President's budget. As you mentioned, there is no increase over
    the 2009 appropriation. However, the boost in appropriations
    that we received through your support with the Recovery Act has
    helped us and given a significant increase to our program and
    allowed us to keep on schedule. So as far as our capability, we
    feel that the budget is the capability that we can maintain in
    2010, given that and the Recovery Act funds that we have.
        Senator Bennett. Good. Thank you.

                              TERMINATING PROJECTS

        I'm concerned about failure to complete existing projects.
    I think the chairman visited this issue as well. As I see it,
    this budget cancels 100 ongoing construction projects funded in
    fiscal 2009, not addressed in 2010. Terminating ongoing
    projects obviously long-term creates an enormous cost for the
    taxpayer.
        So Mr. Salt, can you quantify what you expect the Corps to
    be able to pay in contract termination fees if we adopt this
    request? Or will they simply be delayed and resumed at a
    certain point hereafter, which could potentially be
    significantly more expensive as construction costs go up?
        Mr. Salt. Sir, I don't know the number of projects that we
    have stopped. There's one project that, the Ozark Jeta Project
    I believe the chairman mentioned earlier, is a----
        Senator Bennett. I've noted that as well.
        Mr. Salt [continuing]. Has a continuing contract. The
    estimated termination costs if we're required to terminate are
    estimated at $12 million. That project--at the time we put the
    stimulus list together, our assumption was that that project
    would be in the budget. So it wasn't included in our list. It
    would have----

                             ECONOMIC RECOVERY ACT

        Senator Bennett. So you're saying it was not included in
    the Recovery----
        Mr. Salt. It was not in our initial stimulus list. When the
    final guidance--when we finally determined what was our
    criteria, on the benefit to cost----
        Senator Bennett. Right.
        Mr. Salt [continuing]. The benefit to cost ratio from that
    project fell under the--we were not able to get to it with the
    available funds that we had. Because it has a higher benefit to
    cost ratio than other projects that we included on our stimulus
    list, we are now looking at the possibility, if funds are
    available based on our execution of the Recovery Act funds,
    this would be a priority for us to include under Recovery Act
    funding, and that's something we will seriously look at.
        Senator Dorgan. Mr. Secretary, that gets to the point I was
    trying to ask you about earlier. I believe you were working on
    the fiscal year 2010 request at the same time that we provided
    funding for the Economic Recovery Act for you. As I said, there
    was zero money requested, inexplicably, for water projects in
    the economic recovery package.
        We provided money, then you began working on how that money
    would be spent, and that was concurrent with your work on the
    fiscal year 2010 budget request. So when you say that you
    expected it to be in the budget request, so you didn't put it
    in the economic recovery package, you were doing both of them.
    That's what I was trying to get at. Or did that list go
    somewhere else for somebody else to make decisions? And if so,
    whom?
        Senator Bennett. I'm assuming from your question and the
    chairman's explanation, from your answer to me and the
    chairman's probing, I'm assuming that we can expect some
    reprogramming requests from you to try to put some of this back
    in.
        Mr. Salt. Sir, that decision has been made. It is a
    priority, and I think as we move forward--I guess, Mr.
    Chairman, your comment gets to what I was trying to answer when
    I apologized for the delay. I think there were two areas where
    this came up. One was on the beach projects, where we were
    trying as a matter of policy to decide whether to fund some of
    them in the Recovery Act or not. We ended up doing not only
    initial nourishment, but also re-nourishment, and doing that as
    part of the budget, and not to include funding for those in the
    stimulus.
        Similarly, we were putting the stimulus together, we did
    make what turned out to be a wrong assumption that we would
    proceed with the continuing contracts in the budget. It turned
    out that the performance-based guidance we received was that we
    would fund down to a benefit to cost ratio for which the Ozark
    Jeta Project didn't compete on a benefit to cost basis, and it
    was not included in the President's budget.
        So it was our decision. Basically, we said here is the
    broad guidance we were given. As we applied that broad
    guidance, the Ozark Jeta Project fell below the threshold.
        Senator Bennett. You do incur an obligation to repay people
    who have been involved. Do you have plans to reimburse the
    Southwest Power Authority or their ratepayers for the $20
    million that they've contributed?
        Mr. Salt. Sir, that's why it's a priority that we consider
    it for the available funds in the Recovery Act.
        Senator Bennett. So it would be cheaper, wouldn't it,
    rather than reimburse that $20 million, to simply go ahead and
    finish it?
        Mr. Salt. Yes, sir, I think it would.
        Senator Bennett. Okay, then let's go ahead and finish it.
        I understand, having experience with OMB that OMB sometimes
    has a different view of life than agencies, and I won't press
    you any further on that. But I do feel that failing to complete
    existing projects ultimately ends up as a waste of taxpayers'
    money.
        Thank you, Mr. Chairman.
        Senator Dorgan. I think that there can be cases where an
    existing project at some point becomes a project that someone
    says, well, we'll reevaluate; it sounded good when we started
    it, but this is no longer a project that makes much sense.
        But the Senator from Utah makes an important point. If this
    project should be continued--I'd much sooner appropriate
    funding to finish a project that is worthy rather than pay
    penalties to end the project. I mean, $12 million or $20
    million is a lot of money.
        Did anyone raise this during the deliberations of the
    budget and the Recovery Act, or was it just not raised?
        Mr. Salt. Sir, we raised it and my counterparts in OMB even
    said I could blame them if I wanted. But I don't----
        Senator Dorgan. Maybe you just did.
        Mr. Salt. No, sir. No, sir. What I'm trying to say is I'm
    here and I take ownership of this budget. I'm trying to explain
    the rationale for it.

                               BUDGET PRIORITIES

        Senator Dorgan. I understand the difficulty. We're not
    trying to ruin your breakfast here. As I said at the start, you
    come representing a budget. You're required to pay fealty to
    that budget. I understand that. And we're just trying to
    understand what the criteria is by which decisions are made and
    who makes them.
        It was very frustrating for us as we watched particularly
    the economic recovery funds and the list, because you didn't
    have a list. You didn't ask for any funding. We provided
    funding. And then there was a list. I had to call the head of
    OMB and I called the White House to find out when would
    somebody start making decisions about funding some of these
    projects, because the purpose of them was to start some sort of
    economic recovery. It took some while to get something off
    center to get it moving.
        So again, I don't--I understand the point you're making,
    Mr. Salt. Yes?
        Mr. Salt. Sir, could I make one comment, that as a new
    person I too am sharing some of your frustration as to how
    we're doing this. We have talked to OMB. We have talked to
    folks that as part of our fiscal year 2011 budget to try and
    work with the Congress to come up with a better way.
        The big issues are what you alluded to, sir, how do you
    ensure that we're funding the highest priority needs, because
    we have a backlog that we can't get to of very high priority
    projects because we're funding the portfolio that we have. So
    we're very interested in trying to come up with a better way of
    working through this in a way that's more mutually
    satisfactory.
        Senator Dorgan. And we want to work with you. We want you
    to succeed. We want the best decisions possible to come out of
    all of this. This is not a subcommittee where there are
    political battles going on. We're all very interested in water
    and energy issues and we want the best decisions to be made. We
    want to work with you, and we appreciate your being here.
        A new member of this subcommittee, and we're pleased to
    have him, Senator Tester.
        Senator Tester. Thank you, Mr. Chairman.

                          MISSOURI RIVER RECOVERY PLAN

        We'll start with the General. But, Mr. Salt, if you want to
    throw in on this one you can. The Army Corps requested $70
    million for the Missouri River recovery plan. Senator Bond
    spoke of it a bit ago. Part of this money is to be used for
    completing an environmental analysis and engineering on an
    intake dam near Glendive, Montana. The replacement of that dam
    will open up about 240 miles to pallid sturgeon on the
    Yellowstone River.
        I guess the question is, does the $70 million request for
    that line item allow for the intake dam project to proceed in a
    timely manner?
        Mr. Salt. Senator, it does allow for it to proceed in a
    timely manner. There were also funds in the Recovery Act for
    that, so the combination of these allows us to proceed in a
    timely manner.
        Senator Tester. Thank you. What's the timeframe on that, on
    the removal and replacement of that dam?
        Mr. Salt. That I'm going to have to get the detailed
    schedule. I don't have it with me right now.
        Senator Tester. If you could do that and get it back to my
    office, I would certainly appreciate that. Thank you very much.

                              FORT PECK RESERVOIR

        Talk a little bit about--we'll talk a little bit about
    some--and this is also for you, General--about some lots on
    Fort Peck Reservoir. The WRD Act of 2000 authorized conveyance
    of about 400 cabin sites in four areas around Fort Peck to
    current leaseholders. I guess the question is that in the last
    2 years the Corps has received about $1.8 million to complete
    the surveys and environmental work to complete the sale. The
    authorization expires next year. Does the Corps have adequate
    resources to complete the lot sales before the authorization
    expires?
        General Van Antwerp. In this case we don't have the entire
    funds to complete this. There is an additional amount of funds
    that is needed to finish this project.
        Senator Tester. Okay. So the Omaha District reported to our
    office that about $1.9 million could be used in fiscal year
    2010 to complete the sales. I'm confused why they told my
    office that, but yet did not put in a request to that effect.
        General Van Antwerp. At this point I need to read about
    capability and what the district did was give you the
    capability. That of course is the amount of funding that could
    be used above the amount requested. In this case, there's no
    money requested in the President's budget for this project.
        Also, I have to remind that we would utilize additional
    funds on projects or studies, but there would have to be
    offsets. So it's all part of, as the budget was assembled this
    project didn't get the funds, but there is a capability to do
    work on this project if funds were appropriated.
        Senator Tester. Okay. The authorization expires next year.
    It's been going on since 2000, a 10-year project. I think that
    there is a will on both sides to do this. What I heard you just
    say is that you weren't going to do it because you didn't have
    capability of doing it?
        General Van Antwerp. No, we have capability of doing the
    work. As we looked at the budget in its entirety and it was put
    together, there weren't sufficient funds to allocate money
    toward this project.
        Senator Tester. Okay, so it didn't come up high enough on
    the priority list to ask for money for this project, is what
    you're saying?
        General Van Antwerp. That's correct.
        Senator Tester. Okay. So are you going to ask for an
    extension of that authorization? Are you just going to let it
    run out?
        You can get back to me on that, if you would. It would be
    good to get it done. Let's just put it that way.

                MISSOURI RIVER RECOVERY IMPLEMENTATION COMMITTEE

        I hate to pick on you, General. I've got another one. The
    Missouri River Recovery Implementation Committee was created as
    an all-inclusive--well, an inclusive; shouldn't say ``all''--
    planning body for the stakeholders throughout the basin of the
    Missouri River. The legislation creating this project, the
    MRRIC Project, prohibited the stakeholders from getting help
    for traveling to these meetings. I've got a couple questions.
        How is stakeholder involvement? If you can't address it,
    you can get back to me on that, too. But how is stakeholder
    involvement as far as this subcommittee goes? That would be the
    first question.
        General Van Antwerp. First of all, it's crucial that we
    have stakeholder involvement.
        Senator Tester. Are they involved?
        General Van Antwerp. They are involved. That's absolutely
    crucial and it is part of the process. As we do all the
    activities--this is in kind of the preplanning stage, which is
    really when those stakeholders need to be involved.
        Senator Tester. I agree with you that it is absolutely
    critical that you get broad-based participation in the
    subcommittee. I can tell you the stakeholder travel is not
    permitted under the project and I have got--I have received a
    fair number of calls saying, particularly from Native American
    tribes who are part of that basin, saying that it's really not
    inhibiting their--its inhibiting their ability to come.
        I just want to get your thoughts on that. I mean, if we're
    getting broad-based attendance now, that truly is broad-based,
    that's a good thing. Going into the future, if it starts to cut
    back I think it would be great to know about that, so we can
    address it.
        General Van Antwerp. I think your concerns, Senator, are
    good. What we try and do in this case--we do not pay those
    funds for them to travel to be part of that stakeholder group.
    But we do try and locate our meetings where----
        Senator Tester. Centralized.
        General Van Antwerp [continuing]. They don't have to
    travel. So we will take--I'll take a close look at this and
    make sure we're not disadvantaging or not getting their input
    because we're not in their location.
        Senator Tester. I appreciate that.

                           SAINT MARY'S CANAL PROJECT

        Mike Connor, it's good to see you, good to see you on that
    side of the table, hope the position's working out well. I
    think you're doing good work.
        The President's budget included funding to conduct NEPA on
    the diversion dam at Saint Mary's Canal. We appreciate the
    recognition from the administration more than you will know
    that this facility is in bad need of repair--a critical first
    step.
        However, while replacing the diversion dam is needed,
    especially as it applies to endangered species protection, it
    does not address the risk of catastrophic failure of the
    overall parts of the system, which are--not if, but when
    they're going to fail. We cannot fix it, the project, as you
    probably know, Mike, until the alternatives are completed
    around it.
        Does the administration support NEPA on the entirety of the
    Saint Mary's Canal Project, and if they haven't been--if you
    don't know that question, I guess my question is would you
    advocate for that?
        Mr. Connor. Well, thank you for your welcome, Senator
    Tester.
        I don't know the complete answer to your question, but I do
    know we do have in the fiscal year 2010 budget a request to
    initiate the NEPA and the ESA consultation that we do need to
    complete.
        Senator Tester. And we thank you for that.
        Mr. Connor. So we will move forward very quickly in that
    manner. We are also having ongoing discussions with the Corps
    and our regional folks and a very good dialogue going right
    now, given the authority that the Corps also has, as to how to
    best move forward and maybe we can do it in a cooperative
    effort in doing our analysis and trying to develop a game plan
    under which we can maybe segment or look at different ways to
    get into the rehabilitation as we move forward with the NEPA
    and the ESA process.
        Senator Tester. Commissioner, the door is always open. We
    would love to be a part of those conversations. This is a
    critically important project for the northern tier of Montana,
    not only towns, but irrigators, and it's one of those things
    that should have been replaced 30, 40 years ago. But we are
    where we are.

                           RURAL WATER INFRASTRUCTURE

        Another question that deals with the rural water projects
    that received a good sum of money for the recovery package, and
    we appreciate your work there, too. Projects in my neck of the
    woods, Montana, North Dakota, South Dakota, these are long-term
    commitment projects, as you well know. Should we interpret the
    support in the Recovery Act as a renewed commitment from this
    administration to support rural water infrastructure? Is it
    high on their list?
        Mr. Connor. Well, the funding provided for those two rural
    water projects in Montana, I think represents the fact that
    there's a recognition of the need that exists there, and
    certainly trying to implement the Recovery Act in a way that
    met the goals of job creation and meeting other priorities as
    set forth in the legislation. So those two projects did receive
    substantial money.
        There is also a request, I think even maybe for the first
    time, on a couple of those projects for the fiscal year 2010
    budget. Recognizing that those requests are significantly lower
    than the funding provided by Congress, I think it's a
    recognition that we do want to continue toward moving forward
    with progress. Particularly in Fort Peck, I think we're getting
    substantially down the way to completion of the project.
        Senator Tester. Yes.
        Mr. Connor. Rocky Boys is still really in its infancy, but
    there is some level of funding in the 2010 budget to keep the
    activity going there.
        Senator Tester. Well, I certainly appreciate it. Just as a
    sidebar comment, from my days in the State legislature, from my
    first day in the State legislature as a matter of fact, these
    projects were on the list and they've more than doubled in the
    last 10 years because of inflation. I appreciate the
    administration's stepping up and putting some significant
    moneys in because it finally gets us ahead of inflation, and I
    think that we've got to get these projects done or literally a
    good portion of eastern Montana will have a hard time
    surviving. Let's just put it that way.
        Anyway, I thank you all for being at the hearing and I
    appreciate your comments.
        Thank you very much.
        Senator Dorgan. Senator Tester, thank you very much.
        Senator Alexander.
        Senator Alexander. Thank you. Thank you, Mr. Chairman.

                                CHICKAMAUGA LOCK

        I have just two. Thanks to each of you for being here. I
    have just two questions, General, and both of them are of you,
    if I may. I'm concerned the Corps is not properly prioritizing
    Chickamauga Lock near Chattanooga as it considers when to
    complete the construction of the new lock. You've done a lot of
    very important work on it and we appreciate that. But usually
    the Corps determines how important it is to repair or rebuild a
    lock based upon the value of the cargo passing through the
    lock. My concern is that in cases like the one we have at
    Chickamauga the Corps of Engineers isn't able to fully measure
    the value of the lock because the lock plays an important
    supporting role to the Oak Ridge National Laboratory and the Y-
    12 National Security Complex, and the cargo that goes through
    the lock to the Oak Ridge Laboratory, which is the largest
    energy laboratory in the world, and the Y-12 National Security
    Complex, which has to do with nuclear weapons, is different and
    difficult to--is different in terms of evaluating it.
        Is there some way that you can consider the role
    Chickamauga Lock plays in supporting Oak Ridge and Y-12 as you
    assess the value of the lock and prioritize it with respect to
    your other lock repair and construction projects?
        General Van Antwerp. Senator, you make some great points.
    We'll take that under consideration. Right now the
    prioritization goes if it's life safety, then economic is
    slightly below that, but very, very important. So we need to
    look at these other considerations, and I will go and make sure
    that this is plugged in as we look at the value of these; when
    we rate our locks and dams, basically the dams, we have
    categorized all them as to the risk of danger for life safety
    and other factors.
        Senator Alexander. Nationally----
        Mr. Salt. Senator, could I comment on that, sir?
        Senator Alexander. Yes, of course.
        Mr. Salt. As we talked earlier, the current guidance for
    the Corps, national guidance, called the principles and
    guidelines, directs the Corps to focus on the aspects of a
    project that optimize the economic development, the NED plan.
        Senator Alexander. Right.
        Mr. Salt. The new P and G will attempt to look at other
    non-monetary factors as a way to try and expand the way we look
    at projects to include these other kinds of considerations. As
    I mentioned earlier, we expect to have our new draft of this
    out later this summer. But I would hope that it would give us
    the analytical basis and the national policy basis to try and
    get at the kinds of issues that you're raising.
        Senator Alexander. Well, the National Academy of Sciences
    in its report--well, in a variety of ways, but in its work with
    the Augustine Commission, which we called America Competes, one
    of the most important pieces of legislation we passed in
    Congress, said that America's brain power advantage since World
    War II is the single greatest contributing factor to our high
    standard of living. That's economic development.
        And the Oak Ridge National Laboratory is the single largest
    energy research laboratory in America, perhaps the world. So
    our great laboratories are our principal engines of economic
    development, not just in Tennessee, but in our country. And
    that's been recognized by the National Academies of Science and
    Engineering and Medicine. It's been affirmed by the Congress in
    our America Competes Act, where we prioritized those efforts.
        So national security is of course another part of it, but
    if we're going strictly on economic development--I remember
    when I was Governor of Tennessee I tried many different ways to
    help our State improve our low family incomes. I tried getting
    rid of the usury limit and I tried building highways. I tried
    everything, but it all came back to education. I eventually got
    into funding centers of excellence and master's teachers and
    chairs of teachers and creating distinguished scientist
    programs between the Oak Ridge National Laboratory and the
    University of Tennessee as the single best way to create higher
    family incomes, economic development. In fact, we became the
    State with the fastest growing family incomes in the country.
        So I'd make a strong argument that the Oak Ridge Laboratory
    and similar institutions around the country fit the economic
    development title or even should lead it. Economic development
    today is different than it was 50 years ago, most people who
    work in it understand that better schools, colleges,
    universities, national laboratories are essential to it.
        Anything else on Chickamauga I should know or ask about?
        General Van Antwerp. I will just tell you it's very high on
    our priority and we're watching it closely and having periodic
    reviews of it. It's moving along.
        Senator Alexander. Well, we've talked about it before and
    it has great importance to our entire region in terms of jobs.

                        CENTER HILL AND WOLF CREEK DAMS

        The other question I have has to do with Center Hill and
    Wolf Creek Dams. I greatly appreciate the priority that you've
    placed on those two dams. The President's budget request shows
    support for funding levels that will continue to keep the
    projects on track with minimal disruption to residents. There's
    a safety problem in Kentucky and in Tennessee outside
    Nashville.
        Now, here is my goal and my question. I'd like to get the
    lake levels back up to pre-construction levels as rapidly as we
    possibly can, because while the lake levels are low we're
    having to buy $100 million worth of electricity every year from
    outside sources that would otherwise be produced by
    hydroelectric.
        Now, this administration is placing a very high value on
    carbon-free electricity from renewable energy and the simplest,
    cleanest form of renewable energy is hydroelectric power. So my
    question is, is there a way that you can continue to do your
    work there, finish the work that you're doing about seepage,
    and bring the lake levels back up to their pre-construction
    levels so we can use that carbon-free electricity that we can
    produce?
        General Van Antwerp. Your point is very well made. I assure
    you we're going to bring those lake levels up as soon as we can
    and still have the proper safety measures. So now that we've
    got the grouting walls in Wolf Creek, for example, that allows
    some raising of that elevation. But it may be farther down the
    road before we can get back to pre-construction levels.
        Safety is the primary concern here. But I assure you we're
    trying, and we're reviewing this. What is the next level? We've
    got all of our experts on it to see, now that you have the
    grouting walls done, what does that allow you to do. We'll do
    some raising of it. As we've had inflows in and raised it up,
    we're watching the boils down below the dam that have lessened,
    by the way, because of the grout curtain.
        But we'll get it up there as soon as we can.
        Senator Alexander. I appreciate that and I have no
    complaint to make about anything about your work there. I just
    thought maybe I'd give you some extra ammunition, given the
    administration's focus on carbon-free electricity. This is a
    significant amount in an area--otherwise we use more coal or
    other things.
        Mr. Chairman, those are the only questions I have. I thank
    you for the time.
        Senator Dorgan. Senator Alexander, thank you very much.

                           RED RIVER VALLEY FLOODING

        Two other points, Commissioner Connor and Secretary
    Archuleta, I'm going to send you a note. I would ask that you
    respond if you would about additional information that you may
    be sending to OMB about the record of decision that's awaiting
    us on the Red River Valley Water Project. The previous
    secretary did not issue a record of decision. I understand
    there is discussion between your agency and OMB and my
    expectation is that you'll be sending them additional
    information. If you would give me a report on that, that record
    of decision has been waiting for some while.
        General Van Antwerp, I did not mention the Red River Valley
    flooding situation and the work that we have done. You've been
    in a number of meetings on the Devil's Lake flooding, chronic
    flooding problem. I'll be holding meetings on Saturday morning
    in Valley City, North Dakota, and Jamestown, North Dakota,
    about the James River and the Cheyenne River, both of which had
    very serious flooding this year. So we're working on a lot of
    issues with you in our State.
        I think all of us on this subcommittee find ourselves in
    that position. That's one of the reasons we aspire to be on
    this subcommittee, to address some very significant water
    policy issues.
        So we will continue to have those discussions. I didn't
    mention them earlier, but I wanted to make note for the record,
    just because we have had a lot of discussions recently about
    them, that they remain a significant priority.

                         ADDITIONAL COMMITTEE QUESTIONS

        I want to thank you for appearing. We will be submitting a
    list of questions to you and ask that you respond to them, and
    we appreciate very much your being here today.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                    Questions Submitted to Terrence C. Salt
                 Questions Submitted by Senator Byron L. Dorgan

        Question. Who is the responsible official for approving what goes
    into the Corps' budget?
        Answer. While the Army made recommendations, this is ultimately the
    President's fiscal year 2010 budget.
        Question. Were you also the responsible person that made the
    decisions as to what projects were included in the Recovery Act?
        Answer. Yes, I was ultimately responsible for those decisions.
    Within the Corps headquarters, a senior management group is responsible
    overseeing the American Recovery and Reinvestment Act of 2009 (ARRA)
    activities.
        Question. Could you tell us a little about the decisionmaking
    process that went into the Recovery Act?
        Answer. USACE received $4.6 billion of ARRA funds in 6 different
    appropriation accounts. The projects selected represent a set of
    investments that will contribute to economic development. The Civil
    Works projects will further these Recovery Act stated purposes of
    preserving and creating jobs and promoting recovery as well as to
    invest in transportation, environmental protection and other
    infrastructure that will provide long term economic benefits .
        The Corps followed the Recovery Act's guidance which included
    commencing expenditures and activities as quickly as possible
    consistent with prudent management. The Corps made its allocation of
    Recovery Act construction funds based on the economic and environmental
    return of its ongoing projects. The projects will achieve the purposes
    of the Recovery Act to commence expenditures quickly by investing in
    infrastructure that will provide long term economic and environmental
    benefits to the Nation. Moreover, the projects are fully consistent
    with the President's direction to ensure that Recovery Act funds are
    spent responsibly and transparently.
        The projects also meet the five criteria enumerated in the
    Congressional report accompanying the Recovery Act, namely that the
    projects:
      --Be obligated/executed quickly;
      --Result in immediate employment;
      --Have little schedule risk;
      --Be executed by contract or direct hire of temporary labor; and
      --Complete a project phase, a project, an element, or will provide a
            useful service that does not require additional funding.
        Question. I find it interesting that beach renourishment projects
    were deemed not eligible for funding in the Recovery Act and yet when
    the budget was released less than 3 weeks later, beach renourishment
    projects were included in your fiscal year 2010 budget. You had to be
    working on both of these at the same time. How is it that this decision
    was made?
        Answer. The administration has reviewed the policy for beach
    nourishment and re-nourishment in the context of Flood and Storm Damage
    Reduction. After reviewing the policy, the decision was made to have
    beach nourishment and re-nourishment projects compete for funding with
    other Corps construction projects. The decision was made to support the
    highest performing beach nourishment and re-nourishment projects and
    the first opportunity to do so was in the fiscal year 2010 budget.
        Question. It took 5 weeks from the time the President's budget was
    released on May 7 for the COE to provide detailed budget
    justifications. You knew in March what your funding allotment was going
    to be. Reclamation on the other hand did not find out their allotment
    until much later, yet managed to get their justifications released with
    the budget. What was the problem?
        Answer. I regret that the materials were not provided in a timely
    manner. We will work diligently to provide budget materials in a timely
    manner in the future.
        Question. Are you aware of any other agency in the executive branch
    that took this long to get their budget justifications submitted?
        Answer. No.

                       OZARK-JETA TAYLOR POWER PLANT, AR

        Question. I am surprised that the contract for the Ozark-Jeta
    Taylor power plant is not funded for completion in the fiscal year 2010
    budget. This is a project that you have budgeted for in prior years.
    Can you explain why you are not choosing to fund the completion of this
    contract in fiscal year 2010?
        Answer. The Ozark-Jeta Rehabilitation Contract was not funded this
    year because the decision point for allocation of funding to high-value
    projects was made on a performance basis within available resources.
    The Ozark-Jeta Rehabilitation project has a benefit-cost ratio (BCR) of
    1.8, which fell below the 2.5 BCR funding threshold.
        Question. What is the cost to complete this contract?
        Answer. The costs to complete this contract is $33 million.
        Question. What is the cost to terminate this contract?
        Answer. The costs for the termination is estimated to be $20
    million.
        Question. Why couldn't Recovery Act funds have been used to
    complete this project?
        Answer. At the time decisions on Recovery Act project selections
    were made, the Army did not know the full extent of the fiscal year
    2010 budget policies or the impacts on specific projects of such
    decisions. Therefore the Army did not know how Ozark-Jeta would be
    specifically treated in the budget.
        Question. Was the criteria for inclusion in the Recovery Act
    different than the criteria utilized in the fiscal year 2010 budget?
        Answer. Yes, there were many projects funded through the Recovery
    Act that would not be included in the fiscal year 2010 budget.

                                    EARMARKS

        Question. Do you or Ms. Archuleta have any idea how President
    Bush's Executive order on earmarks will be enforced by President Obama?
        Answer. No, I do not.
        Question. For fiscal year 2009, Congress referenced all of the
    Corps and Bureau text and tables into the law. Is this causing you any
    execution issues?
        Answer. No.
        Question. Is this contributing to an increase in carry over from
    one fiscal year to the next?
        Answer. No.

                       NORFOLK HARBOR, CRANEY ISLAND, VA

        Question. I notice that you have recommended funding for the
    Norfolk Harbor, Craney Island project as a new start construction
    project for fiscal year 2010. As authorized in WRDA 2007, this project
    is to be 50/50 cost shared between the Federal Government and the local
    sponsor. However, it is my understanding that the Chief of Engineers
    recommendation for the project was that it be cost shared at 4 percent
    Federal costs and 96 percent non-Federal costs.
        Explain to us how a project that was authorized in violation of
    your own policies was funded as a new start in your budget?
        Answer. The decision on which projects to start is based on their
    benefit-cost ratios. This project has a benefit-cost ration of 3.6 to 1
    and was within the range of high-value projects selected for new
    starts. The project was first authorized in WRDA 98 at the 4/96 Federal
    non-Federal cost sharing based on the Chief's report of 1997. The
    budget is based on the project being executed at that cost sharing,
    rather than at the subsequently revised cost sharing.
        Question. Are you aware of any other time that the administration
    has recommended funding for a project that was not authorized in
    accordance with administration policy?
        Answer. Yes, and in that case also the project was budgeted on the
    basis that it would be executed at cost shared in accordance with
    policy.
        Question. What makes this one special?
        Answer. It is a high performing project with a benefit to cost
    ratio of 3.6.
        Question. You proposed $28.5 million for fiscal year 2010 which is
    clearly less than 4 percent of the total project cost of $750 million.
    Your budget justification indicates that once you fulfill the 4 percent
    Federal share that no more funding will be recommended by the
    administration. Are you not then leaving us with the problem of
    fulfilling the cost share authorized in law?
        Answer. The 4 percent share is based on the allocation of project
    costs as shown in the Chief's report of 1998 and reflective of the
    large local sponsor investments that must be made in land-side
    facilities and lands, easements and rights of way.

                          INLAND WATERWAYS TRUST FUND

        Question. You have again proposed a lockage fee as a replacement
    for the current diesel tax on the Inland Waterways as a way to enhance
    revenues in the Inland Waterway Trust Fund. This fee was roundly
    rejected by industry and Congress last year.
        Do you see a different outcome this year?
        Answer. The Inland Waterways Users Board formed an Inland Marine
    Transportation System (IMTS) Investment Strategy Team, with
    participation by representatives of the inland navigation community and
    Corps of Engineers representatives from around the country, to consider
    long-term investment options and to address the shortfall in the Inland
    Waterways Trust Fund (IWTF). The intent of this effort is to reach a
    consensus approach to address this issue.
        Question. Has the administration worked with the Finance or
    Environment and Public Works Committees in the Senate to determine what
    might be acceptable to enhance these revenues?
        Answer. I am not aware of such discussions.
        Question. This subcommittee will write a bill to conform to the
    revenues as they currently exist in the Trust Fund. No solution to the
    inadequate revenue nor forgiveness of the matching requirements of the
    Trust Fund will be proposed by this subcommittee.
        Were other methods to raise revenues besides this fee proposal
    considered?
        Answer. The administration proposal reflects some changes from the
    bill proposed last year, and a number of possibilities are being
    evaluated by the IMTS Investment Strategy Team to address the solvency
    of the IWTF.
        Question. What were they?
        Answer. The IMTS Strategy Investment Team is evaluating options
    such as increasing the current fuel tax, lockage fees, and a
    combination of funding methods.
        Question. How is the economic slowdown affecting the revenues in
    the existing Trust Fund?
        Answer. Revenues generated by the fuel tax are lower in fiscal year
    2008 and fiscal year 2009 than in recent years, about $85 to $87
    million. Revenues generated for the Inland Waterways Trust Fund are
    affected by many factors such as the overall economy, fuel efficiency
    of towboat engines, market conditions for the various commodities
    transported on the inland and intracoastal waterways, etc. At least
    part of the decline in revenues in fiscal year 2008 and fiscal year
    2009 is attributable to the economic slowdown.
        Question. Will we have to slow down work even further?
        Answer. The IWTF projects and corresponding amounts proposed in the
    President's fiscal year 2010 budget are predicated on revenue
    projections of $85 million in fiscal year 2010. The budget also
    provides for using that revenue to bring the few remaining
    rehabilitation projects under construction that were exempt from cost-
    sharing in the fiscal year 2009 Omnibus Act back into a 50 percent-50
    percent balance between Construction Appropriations and IWTF. Due to
    the number of projects currently underway, the large funding
    requirements of those projects, and the lack of IWTF resources,
    available revenue will be applied to ongoing projects so as to make
    reasonable progress on high performing projects.

                                   EVERGLADES

        Question. I am concerned by your Everglades request of $214.3
    million for fiscal year 2010. This amount is in addition to $123
    million we provided in the fiscal year 2009 Omnibus and more than $100
    million that you have proposed in the Recovery Act. That is nearly $440
    million provided in a matter of months that is intended to be utilized
    no later than September 30, 2010.
        Your track record on expending Everglades funding has not been all
    that great. Do you really believe you can efficiently use this much
    funding this fast?
        Answer. I believe the Everglades program has reached a point of
    maturity where efficient progress can be made using the full amount of
    funds budgeted.
        Question. According to an article in the Miami Herald on June 16,
    issues between the State and Federal Governments over how the State
    will be credited for land purchases are holding up initiation of the
    Picayune Strand project planned for fiscal year 2009. You budgeted
    $21.9 million in fiscal year 2009 to start this project and included
    $40.8 million in the Recovery Act to accelerate the project. It appears
    that none of these funds can be spent based on this article, is that
    correct?
        Answer. The issues described in the Miami Herald all have been
    resolved. The Master Agreement for the Comprehensive Everglades
    Restoration Plan (CERP) is scheduled for execution on August 13, 2009,
    as is the Project Partnership Agreement (PPA) for the Picayune Strand
    project. Following execution of these agreements, the Picayune Strand
    project construction will be initiated. The Corps is prepared to award
    and obligate all of the fiscal year 2009 appropriated funds, as well as
    the ARRA funds provided for Picayune Strand, in October 2009.
        Question. If the dispute is not resolved by October 1, you may
    carry over the $62.7 million planned for the Picayune Strand element.
    In addition, your budget indicates that you have programmed an
    additional $44.4 million in fiscal year 2010. I believe that makes the
    total just over $107 million for this project in fiscal year 2010 if
    the agreements can be worked out on crediting. Is that correct?
    Realistically do you believe you can execute this funding?
        Answer. Yes, $107 million is scheduled to be obligated for work
    planned on the Picayune Strand project, using funds previously
    appropriated and funds budgeted in fiscal year 2010. The execution of
    the Master Agreement and the Picayune Strand Project Partnership
    Agreement as scheduled August 13 will clear the path for construction.
    The first construction contract on the Picayune Strand project is
    scheduled to be awarded in October 2009, and the second contract is on
    schedule to be awarded in fiscal year 2010.
        Question. Your fiscal year 2010 budget proposes two more new starts
    for a total of $70 million. I believe you also have planned new starts
    for Mod Waters that you will be carrying out for the Interior
    Department.
        It appears that there are an awful lot of planned starts and little
    action on getting anything built. I have to ask, is it prudent to
    propose two more new starts in fiscal year 2010, for funding that will
    likely have to be carried over into fiscal year 2011?
        Answer. The fiscal year 2010 budget proposes the initiation of
    construction of two additional CERP projects, the Indian River Lagoon
    South C-44 ($22 million) and Site 1 Impoundment ($25 million). The
    Corps expects to obligate all those funds in fiscal year 2010. The
    Master Agreement will provide a streamlined process toward project
    delivery. With its planned execution on August 13 of this year, the
    CERP program is taking a major step forward in delivery of planned
    projects. Design efforts on the Indian River Lagoon and Site 1
    Impoundment projects will be complete, and construction is ready to be
    initiated, consistent with project sequencing in the Integrated
    Delivery Schedule.
        Question. We have an abundance of needs for that funding in fiscal
    year 2010. Despite the merits of the Everglades project it seems
    imprudent to be ``parking'' large sums of money in the project that
    cannot be utilized. This is not like running into an unexpected
    construction delay. The Miami Herald article indicates that this
    crediting dispute has been ongoing for 4 years. Don't get me wrong, I
    believe that restoration of the Everglades is a worthwhile expenditure
    of taxpayer funds, and this subcommittee has been supportive of it.
    Since fiscal year 2000, this subcommittee has appropriated more than
    $1.3 billion to the various components of Everglades Restoration. That
    is a far bigger commitment than we have made to any other project over
    the same period. However, let's assume that everything falls into
    place. Will there be enough personnel to execute all of this planned
    work? How will this massive infusion of funding for Everglades projects
    affect future Corps budgets?
        Answer. The crediting dispute is now resolved. As for personnel
    available to execute the program, the Corps is accustomed to adjusting
    management and oversight personnel in response to changing program
    levels and has plans in place to adjust personnel levels to short term
    and long term needs of the Everglades Restoration program. Each year we
    will consider the level of construction required to support planned
    Everglades work and balance these needs against the needs of other high
    performing projects.
        Question. In fiscal year 2010, the Everglades gobbles up more than
    13 percent of the Corps construction budget. The next highest funded
    project is the Herbert Hoover Dike, also in Florida, accounting for
    about 8 percent of the construction funds. That means that more than
    one-fifth of your construction money is going to Florida. I realize
    that the work is where the work is, but you can see that this puts me
    in a little bit of a quandary. Senator Feinstein would argue that there
    is plenty of work needed for flood control projects for Sacramento and
    Los Angeles. Senator Landrieu would argue that there is plenty of work
    needed for hurricane protection for the Louisiana Gulf Coast. Senators
    McConnell and Alexander would argue that there is plenty of work needed
    to repair Wolf Creek and Center Hill Dams. Senators Schumer and
    Gillibrand would be happy to tell you about the work that could be
    accomplished on the New York and New Jersey project. It is certainly
    not my intent to pit one Member of the Senate against another, but you
    can see my dilemma. These are all authorized worthwhile projects. Yet
    you have not accommodated their needs in your budget in the manner that
    you have accommodated the Everglades. What am I to tell these members?
        Answer. The administration has made funding decisions based on the
    performance of the projects. As the higher performing projects are
    funded to completion, opportunities to consider other projects will
    expand.
        Question. The budget justification for the Everglades again shows
    more than $4 million in Corps funding for the Modified Waters Delivery
    Plan. I thought Congress was quite clear in the fiscal year 2009 E&W
    bill, that this project should be funded through the Department of the
    Interior. Why is this included in the Corps budget when Congress has
    made it abundantly clear that this project should be funded 100 percent
    by Interior?
        Answer. Completion of the Modified Water Deliveries to Everglades
    National Park Project remains a high priority for the administration.
    The fiscal year 2010 budget reflects the administration's continued
    belief that the Corps and the Department of the Interior each has a
    role to play in restoring flows to the Park.
        Question. How much of the funding that this subcommittee has
    provided for Mod Waters was carried over into fiscal year 2009? How
    much will be carried into fiscal year 2010 based on current
    projections?
        Answer. The unobligated carry over from fiscal year 2008 into
    fiscal year 2009 was $32 million because the Corps was unable to award
    a contract for modifications to Tamiami Trail as a result of
    uncharacteristically high cost growth in the construction industry at
    the time. Since that time, the project scope has been revised and all
    associated issues have been resolved. No currently available funds are
    projected to be carried over into fiscal year 2010--all USACE available
    funds will be obligated on the Tamiami Trail construction contract,
    which is scheduled for award in September 2009.
        Question. I was surprised at your recommendation of more than $100
    million for Everglades' projects in the ARRA. The Everglades projects
    consistently receive one of, if not the highest allocation of funds in
    our annual bill. These annual amounts are supposed to be very close to
    the Corps capability. You notified me in a letter dated June 15 that
    one of the projects, ``Site 1'', has been removed from the ARRA list. I
    believe this project was planned for over $41 million in Recovery Act
    funding. Can you tell me about the decision process that brought you to
    include this project in the ARRA and the decision process to remove
    this project for consideration?
        Answer. The Everglades project is one of the highest value major
    environmental projects that this administration is pursuing. The
    project is of such value that the Army sought to accelerate the current
    plan through the use of ARRA funds. As explained in the referenced
    letter of June 15, 2009, if appropriations for Site 1 are made
    available in the Energy and Water appropriations for 2010 as
    recommended by the President, then Site 1 would be eligible to receive
    Recovery Act monies, if such are available at that time. Should
    Congress not provide construction funds for Site 1 in fiscal year 2010,
    then Recovery Act funds cannot be used for that project.
        Question. How much of the funding is anticipated to be carried over
    from fiscal year 2009 to fiscal year 2010?
        Answer. The estimated carry over from fiscal year 2009 to fiscal
    year 2010 for the South Florida Ecosystem Restoration (SFER) Program is
    $31 million. The majority of carry-over funding is due to delays in
    execution of the Master Agreement and to the receipt of favorable
    contract awards.
        Question. There has been a lot of talk of the State of Florida
    purchasing the lands belonging to U.S. Sugar. If that happens, will
    that affect the analysis of the projects that have already been
    planned?
        Answer. The affects of any lands purchased by the State of Florida
    remains uncertain, since the State has not yet determined their planned
    use of any lands purchased. However, the Corps has determined that the
    U.S. Sugar acquisition is not likely to affect the majority of projects
    identified for early implementation in the Integrated Delivery
    Schedule. Because of its proximity to the lands being acquired and
    potential affects to planned CERP features, the Everglades Agricultural
    Area Phase 1 Reservoir Project Implementation Report development has
    been suspended pending the outcome of the sugar purchase and assessment
    of affects planned use of U.S. Sugar lands may have.
        Question. Put more simply, this would be a major change without
    project conditions. How will that be incorporated into the design of
    current and future projects?
        Answer. The projects currently under construction and in design are
    not likely to be affected. However, it is possible that the State's
    land acquisitions may provide opportunities to improve the CERP Plan.
    The land purchase provides several key areas that may allow for
    substantial savings in the future.
        Question. Might this purchase result in the need for a major
    reevaluation of the suite of projects being considered for the
    Everglades?
        Answer. The projects currently under construction and in design are
    not likely to be affected. If the State indicates its intent to make
    the lands available for potential use in the CERP, the Corps would
    prepare a report to assess these opportunities, which would then be
    evaluated in detail in Project Implementation Reports and proposed for
    authorization.
        Question. There has been considerable discussion of global climate
    change and sea level rise in the media. Some of the more extreme
    projections I have seen show much of Southern Florida under water.
    While that is a possibility, how is the design of the current projects
    considering global climate change?
        Answer. The September 2008 Biennial Report to Congress recommended
    that additional studies be undertaken to determine sensitivity of
    restoration efforts to sea level rise. A CERP Technical Data report is
    now being developed to identify the potential impacts for a range of
    sea level rise scenarios. The initial draft of this Technical Report is
    expected to be available in late 2009.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

        Question. In late 2005, following hurricanes Katrina and Rita,
    Congress directed the Secretary of the Army (Public Laws 109-103 and
    109-148), acting through the Chief of Engineers, to conduct a
    comprehensive hurricane protection analysis and design in close
    coordination with the State of Louisiana and its appropriate agencies;
    to develop and present a full range of flood control, coastal
    restoration, and hurricane protection measures exclusive of normal
    policy considerations for South Louisiana; to consider providing
    protection for a storm surge equivalent to a Category 5 hurricane; and
    to submit a preliminary report within 6 months of enactment and final
    technical reports within 2 years. We now refer to this report as the
    LACPR or Louisiana Coastal Protection and Restoration Study or the
    ``Category 5 Report''.
        Mr. Secretary and General, I understand that this report is now
    under further public review, but can you please detail for this
    subcommittee why is this report is nearly 2 years late? Additionally,
    please detail how the money appropriated for this report has been
    spent? Lastly, when the report is transmitted--will it contain specific
    recommendations for the authorizations of projects?
        Answer. Inserted below is a letter that was forwarded on February
    9, 2009 to the President of the Senate regarding the progress of the
    Louisiana Coastal Protection and Restoration (LACPR) Technical Report.
    It also discussed actions required to complete the technical report.
        As indicated in the letter, the Corps has worked diligently to
    ensure that the report addresses the entire scope of issues required by
    statute, including developing a full range of flood control, coastal
    restoration, and hurricane protection measures without regard to normal
    policy considerations related to the economic justification of
    projects, as well as to submit a final technical report for protection
    from Category 5 storm events.
        The Corps also has worked to coordinate its efforts with State and
    Federal agencies, obtain independent external peer review, and
    incorporate lessons learned from the Interagency Performance Evaluation
    Task Force.

                                Department of the Army,
                             Office of the Assistant Secretary,
                                      Washington, DC, February 9, 2009.
    Honorable Joseph R. Biden, Jr.,
    President of the Senate,
    U.S. Capitol Building, Room S-212,
    Washington, DC 20510-0012.
        Dear Mr. President: This letter is to advise you of the current
    progress of the report for Louisiana Coastal Protection and Restoration
    (LACPR) that is being prepared in response to the Energy and Water
    Development Appropriations Act of 2006 and the Department of Defense,
    Emergency Supplemental Appropriations to Address Hurricanes in the Gulf
    of Mexico, and Pandemic and Influenza Act, 2006.
        These statutes directed the Chief of Engineers to conduct a
    comprehensive hurricane protection analysis and design; to develop a
    full range of flood control, coastal restoration, and hurricane
    protection measures exclusive of normal policy considerations for South
    Louisiana; and to submit a final technical report for ``Category 5''
    protection. The final report was originally scheduled for completion in
    December 2007. However, as described in my letter to you of December
    20, 2007, due to the magnitude and scope of the work being considered,
    the complexities of the study, and the necessity to provide a clear and
    fully informed report, additional time was needed to revise the draft
    technical report and to ensure its full coordination with State and
    Federal agencies, including critical independent external peer review
    by the National Academy of Sciences (NAS).
        While this study was underway, we incorporated the extensive
    knowledge and lessons learned from the Interagency Performance
    Evaluation Task Force (IPET) which itself was conducted under the
    review of the American Society of Civil Engineers and the independent
    peer review of NAS. Many of the models and tools that were developed by
    the IPET team provided a critical foundation to this study. Included
    within this study will be a systems analysis of both LACPR and the
    Mississippi Coastal Improvement Program (MSCIP). This continued
    analysis will ensure that we maintain a systems perspective for the
    region.
        The study authorization directed that the recommendations of this
    study not be constrained by normal policy considerations (i.e., not be
    constrained by the ratio of their projected costs to their projected
    benefits). U.S. Army Corps of Engineers (Corps) policy is to recommend
    to Congress a single plan that maximizes net economic benefits in
    meeting the study objectives. Without such a definitive discriminator
    the Corps' design recommendations could default to simply the most
    effective means of providing the required protection, but this approach
    undoubtedly would come at great cost, both to the Treasury and to the
    ecosystem. It is apparent, therefore, that decisions made by Congress
    regarding the activities to be authorized will need to be supported by
    a report that arrays the available information in a way that the
    relative advantages and disadvantages of the various courses of action
    can be readily displayed. An undertaking of such scope and complexity
    as providing comprehensive storm surge protection within a dynamic
    coastal and riverine environment and within an environmentally and
    socially-sensitive framework is an undertaking that requires supporting
    information of far greater scope and complexity than has ever been
    developed for other Civil Works projects.
        Consequently, a new tool to support the decisionmaking process has
    been developed by the Corps. The ``risk informed decision framework''
    was utilized in both Gulf Coast studies to array the various
    alternatives that are considered most likely to be implementable, along
    with the assessments of various stakeholders, in a way that
    communicates the relative advantages and disadvantages of each. As a
    result of this process, decisionmakers should be able to make a well-
    informed decision as to which alternatives can be knit into a holistic
    and systematic solution to the problems and are worthy of further
    pursuit.
        Over the past year, the Corps has worked in partnership with the
    State of Louisiana and other Federal agencies to refine the final array
    of alternatives which would make the Louisiana coast more resilient to
    future storm events. Tremendous efforts have been undertaken by the
    Corps and our partners toward the production of the final report.
    Approximately 20 meetings were held across the Louisiana coast with
    stakeholders and our Federal partners. There was also a critical need
    to ensure that the Corps completed an independent external peer review
    by the NAS. The NAS has provided initial comments and will be
    completing a final review within the next few months. Its initial
    comments are being addressed in the revisions to the technical report.
        In the coming months, the Corps will circulate draft and final
    reports, formerly coordinate the final report with the Governor of
    Louisiana and the Federal agencies, and undertake a final review
    process. The final report will include an array of alternatives with
    evaluation results for each alternative and a comparison of top-ranked
    plans based on input from stakeholders. This will include a ranking of
    alternatives that provide hurricane and storm risk reduction from an
    array of ``Category 5'' storm events. Due to the size and complexity of
    the Louisiana coastal system, a preliminary level of design and cost
    information is included, but a programmatic environmental impact
    statement will not be part of the submission package. The final
    technical report will provide a basis for sound, risk based,
    consideration of possible actions to manage storm surge related risks
    and will take into account previously authorized projects and those
    requiring further analysis.
        The Corps advises me that it will be in a position to submit a
    final report that is responsive to congressional and administration
    directions to this office by August 31, 2009. The Corps will also
    provide an implementation framework with the report. Once the Corps
    provides the complete documentation for the LACPR study, my office and
    the Office of Management and Budget will evaluate the report and
    provide an administration position on further recommendations. I am
    providing a copy of this letter to the Senate Subcommittees on Energy
    and Water Development, and Transportation and Infrastructure.
                Very truly yours,
                                        John Paul Woodley, Jr.,
                                       Assistant Secretary of the Army.
        Since the 2005 authorization, the Corps has obligated and expended
    approximately $22,769,000 on the LACPR Project, as follows:

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Planning and Project Management............................   $9,561,000
    Engineering & Design.......................................    3,944,000
    Socioeconomics and Analysis................................    2,919,000
    Environmental Studies......................................    1,005,000
    Real Estate Investigations.................................       52,000
    Multi-Criteria Decision Analysis (MCDA)....................      849,000
    Public Outreach............................................      783,000
    Other Federal Agencies.....................................      980,000
    Report Development.........................................      535,000
    Agency Technical Review (ATR)..............................      765,000
    External Peer Review.......................................      876,000
    Dutch Shadow Plan..........................................      500,000
                                                                ------------
          Total................................................   22,769,000
    ------------------------------------------------------------------------

        In lieu of specific construction recommendations, the technical
    report recommends implementation options and a path forward beyond the
    technical report.
        The report will require Congress and the administration to make
    tradeoffs with the input of other Federal agencies, the State, local
    government, other stakeholders, and the public. These decisions will
    involve billions of dollars and will impact the coast and its people
    over the next 50 to 100 years.
        All of the final alternative plans may have social and economic
    impacts requiring further evaluation and stakeholder input. The Corps
    will implement recommended projects in the most expeditious manner
    available by maximizing the use of available construction and study
    authorities (i.e., modifications of on-going projects/studies, post-
    authorization change reports, or new authorizations).
        Question. In WRDA 2007, the Congress authorized the Louisiana
    Coastal Area or LCA. This authorization provides --for the first time--
    authorization for coastal wetlands restoration in Louisiana. What is
    the status of this program in general and what is the timetable for
    creating a master plan under this program as required by the act? Has a
    task force been established? If not, why?
        Answer. The authorization for the Louisiana Coastal Area as
    identified in the Chief's Report dated January 31, 2005 required
    additional investigations prior to the initiation of construction.
    Overall, 12 project investigations are underway with 10 of those
    investigations starting after the enactment of WRDA 2007. I am advised
    that the investigations for the features authorized in section
    7006(e)(3) of WRDA 2007 are on track for completion of a Chief's Report
    by December 31, 2010 (as required by section 7006(e)(3)(B). The
    investigations for the features authorized by section 7006(e)(1) are
    scheduled to be completed by November 2011. The investigation for the
    Beneficial Use of Dredged Material Program authorized in section
    7006(d) is scheduled to be completed by July 2010. The investigation
    for the Barataria Basin Barrier Shoreline feature authorized by section
    7006(c) also is scheduled to be completed by July 2010, although issues
    remain to be resolved. The project management plans for the
    investigations for the other features that require submittal of a
    construction report, as outlined in section 7006(c), are being
    coordinated with the State of Louisiana.
        WRDA 2007, title VII, section 7002 provides for the development of
    a Comprehensive Plan. Given the importance of and the extensive,
    ongoing efforts to implement the restoration plan authorized in title
    VII, no work will be initiated to develop a comprehensive plan until
    such time as funds are appropriated.
        Section 7004 of WRDA 2007 establishes the Coastal Louisiana
    Ecosystem Protection and Restoration Task Force (Task Force), but to
    date, funds have not been appropriated to implement section 7004. In
    the interim, the Corps New Orleans District and Mississippi Valley
    Division have successfully engaged Federal and State agency
    representatives at the regional level throughout the study process for
    the Louisiana Coastal Protection and Restoration study and the
    Louisiana Coastal Area program. Similarly, Corps Headquarters has
    engaged Washington-level Federal Principals throughout the study
    process for these efforts. These meetings have been an efficient and
    effective way to communicate and solicit input from the agencies. Until
    funds are appropriated for the Task Force, the Corps will continue to
    engage the Federal and State agencies through the regional working
    group and Federal Principals Group.
        Question. The Corps of Engineers is currently re-evaluating
    Morganza to the Gulf Hurricane Protection project due to projected cost
    overruns. This situation is unacceptable. Congress has done its job by
    authorizing this project and the Corps should move quickly to sign the
    Record of Decision, remove any remaining obstacles and get to work.
    What is the status of this re-evaluation? Will the State and local
    government receive credit for the nearly $200 million they have
    appropriated for this project? In the long term, how with the Corps
    work with State and local partners to allow them to move forward with
    interim measures of protection on critical Federal projects and receive
    credit for this critical work?
        Answer. Section 1001(24) of the Water Resources Development Act of
    2007 (WRDA 2007) authorized 100-year level of risk reduction for
    Morganza to the Gulf based on the Chief of Engineer's Reports completed
    on August 23, 2002, and July 22, 2003. Due to changes in hydraulic
    conditions and design criteria established following Hurricanes Katrina
    and Rita in 2005, a revised project cost estimate was completed in
    October 2008. In this analysis the Corps applied the lessons learned
    and engineering design recommendations for improving the performance of
    hurricane and storm damage risk reduction systems that were identified
    by the Interagency Performance Evaluation Task Force (IPET). The
    results of the revised project cost estimate clearly show that the cost
    to provide post-Katrina 100-year level of risk reduction will exceed
    the authorized project cost by more than 20 percent, thereby exceeding
    the limit imposed by section 902 of WRDA 1986 and triggering the
    requirement for additional authorization. A Post Authorization Change
    (PAC) Report is being prepared to reaffirm the Federal interest and
    seek additional authorization. The PAC Report is scheduled for
    completion by December 2012. Initiation of construction of the Morganza
    to the Gulf project will be dependent upon additional Congressional
    authorization and appropriation of construction funds.
        As is the case for all Work-In-Kind credit, the non-Federal
    sponsor's design and construction will be reviewed for compliance with
    the Hurricane and Storm Damage Risk Reduction System guidelines, and a
    credit determination will be made on a case-by-case basis for each
    project feature.
        In order to maximize the amount of Work-In-Kind credit our State
    and local partners may receive, the Corps will continue to help our
    partners comply with the Hurricane and Storm Damage Risk Reduction
    System guidelines, considered the Federal standard. Specifically, the
    Corps will review and comment on the local sponsor's real estate
    acquisitions, relocations and engineering designs in a timely manner.
    The Corps will also conduct periodic field inspections on the local
    sponsor's construction sites, provide inspection reports, and work with
    the sponsor if any remedial actions are required to meet the Federal
    standard. In order for credit to be awarded, the project will have to
    be reauthorized, construction funds will have to be appropriated, a
    Record of Decision will have to be signed and a Project Partnership
    Agreement (PPA) will have to be executed.
        For any work performed by the our State and local partners in
    advance of the execution of a project partnership agreement to be
    eligible to receive a credit, the reauthorization of the project must
    include a provision that authorizes the Government to provide credit to
    the sponsor for the reasonable and allocable costs of the work
    performed in advance of the execution of the project partnership
    agreement and that the provision of such credit shall be subject to a
    finding by the Government that the said work is compatible with the
    Federal project, is constructed to a design standard that is acceptable
    to the Chief of Engineers, is economically justified and
    environmentally acceptable.
        Question. The Harbor Maintenance Trust Fund (HMTF) was created to
    provide the necessary funding to keep our harbors, ports and waterways
    safe and navigable; yet, the HMTF takes in far more revenues each year
    than it spends despite a backlog of approved projects. (NOTE: In fiscal
    year 2009, due to multiple supplemental appropriations bills including
    those for natural disasters, HMTF expenditures equaled revenues, but
    this is the rare exception, and our ports shouldn't be put in a
    position where they should have to depend on such supplementals simply
    to receive funding for necessary projects). Now that there is a
    substantial balance in the fund, don't you think annual expenditures
    should at least equal annual revenues? Do you think the HMTF should be
    restructured in order to more effectively use the funds collected?
        Answer. The overall Operation and Maintenance (O&M) program is
    prioritized for all missions, including navigation, flood risk
    management, hydropower, etc. O&M funding is budgeted for the diverse
    Civil Works missions based on performance metrics and priorities. The
    O&M budget includes funding for critical maintenance of the highest use
    navigation channels and harbors. If the HMTF funded activities were to
    be increased, other critical mission areas would be adversely impacted.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

                  OZARK-JETA TAYLOR HYDROPOWER REHABILITATION

        Question. I am aware that it is the Corps's policy, and that of
    this Congress, to enter into Continuing Contracts only when they are
    necessary for efficient construction. Congress has limited the Corps
    use of continuing contracts to insure that they are only used when
    necessary, and with the understanding that the Corps will budget these
    contracts efficiently through to completion. You have not budgeted for
    the continuation of the Ozark-Jeta Hydropower Rehab project, which will
    deliver clean, renewable energy into the foreseeable future when
    finished, even as you have budgeted extraordinary amounts for the
    Everglades where the benefits are much less tangible. Further, my
    understanding is that you require only $30 million to complete the
    contract and it will cost $20 million to terminate the contract. To not
    budget to continue this contract appears to be not only bad government,
    but also to contradict past Corps policy regarding budgeting for
    continuing contracts. Please provide the rationale for failing to
    budget to continue the work on the Ozark-Jeta Hydropower Rehab
    Continuing Contract?
        Answer. The Ozark-Jeta Rehabilitation Contract was not funded this
    year because the decision point for allocation of funding to high-value
    projects was made on a performance basis within available resources.
    The Ozark-Jeta Rehabilitation project has a benefit-cost ratio (BCR) of
    1.8, which fell below the 2.5 BCR funding threshold.
        Question. The work for the Ozark-Jeta Hydropower Project is almost
    two-thirds complete. Not only has the Federal Government invested more
    than $44 million to date, the non-Federal sponsors for this project,
    the Southwestern Power Marketing Association, have invested $20 million
    of their money. By your estimate, it will cost $20 million to pay the
    contractor to terminate this contract. Do you have any plans to
    reimburse the SWPA or their rate payers for their out-of-pocket costs?
    Did you consider the impact of this decision on the rate payers?
        Answer. As sponsors and signatories to the Project Cooperation
    Agreement for the project, the SWPA and/or their rate payers are
    subject to paying their share of the costs incurred by the project,
    even those for termination for convenience without reimbursement by the
    Corps or the Federal Government. The Army does not have authority to
    reimburse SWPA.
        Question. I understand that at least one turbine has already been
    dismantled and that an additional turbine has been ordered. What do you
    plan to do with the turbine that has been ordered--let it rust?
        Answer. The Army is currently working with the contractor to assess
    the project schedule to incorporate current funding constraints. Our
    goal is to develop a plan that will allow for beneficial use of all
    funded features of the project.
        Question. How do you expect additional funds ``to become
    available'' if you don't budget for the project? Are you leaving it up
    to this subcommittee to fix this problem? Does it require a
    congressional add, which is disparaged by the administration, to
    correct this lapse in judgment on the Government's part?
        Answer. The Army is looking at other options for funding of the
    project in fiscal year 2010. The Army is working with the Southwestern
    Power Administration, the agency in the Department of Energy
    responsible for marketing the power generated at Ozark, to identify
    ``customer funding'' to continue contractor activities. The Army is
    also assessing the potential to fund fiscal year 2010 scheduled work
    with ARRA funding. If neither of these possibilities work out, the
    project will be put in caretaker status subject to funds coming
    available.
        Question. Mr. Secretary, How much energy will be lost as a result
    of not funding this project?
        Answer. According to the Southwestern Power Administration, the
    amount and value of the lost energy due to forced outages at Ozark for
    the last 2 fiscal years is 82,420 MWh valued at $5.1 million in fiscal
    year 2007; and 153,550 MWh valued at $9.5 million in fiscal year 2008.
    That rate of loss would continue or increase.
        Question. Mr. Secretary, What will happen to the Corps and contract
    workers when this project is terminated?
        Answer. This project is being constructed concurrently with the
    Webbers Falls Powerhouse rehabilitation project. If the Ozark
    Powerhouse Rehabilitation work is suspended or terminated, Corps and
    contract workers will be shifted from Ozark to Webbers Falls. At this
    time, the Corps does expect any employees will be terminated.
        Question. Mr. Secretary, I notice that you have funded the Richard
    B. Russell Powerhouse Rehab project when it has a benefit-cost ratio of
    1.9 which is lower than the BCR of Ozark-Jeta, AR project which is 2.4.
    Can you explain why these two projects which appear to be the same were
    treated differently in the budget?
        Answer. While Richard B. Russell is a Hydropower project on the
    Savannah River in GA and SC, the item budgeted for fiscal year 2010 is
    an environmental mitigation piece of the project. The work essentially
    deals with environmental monitoring of the oxygen injection system.
    Funds are budgeted for procurement and fabrication of 50 percent of the
    Government furnished equipment associated with the underwater diffuser
    system. For the record, the Ozark-Jeta project has a current benefit to
    cost ratio of 1.8.

                                 BUDGET REQUEST

        Question. In your press release on the fiscal year 2010 budget you
    state that ``The budget represents the prudent level of investment in
    the Nation's water infrastructure and in the restoration of its aquatic
    resources. I am proud to present it.''
        What exactly are you proud of? Is it the more than 100 on-going
    construction projects funded in fiscal year 2009 that are not addressed
    in this budget, or is it the $227 million decrease from what we
    provided in the fiscal year 2008 Omnibus?
        Answer. I am proud of the fact that the fiscal year 2010 budget
    provided an increase of nearly 9 percent above previously budgeted
    levels for the Corps of Engineers water program. The budget includes
    $5.125 billion in new Federal funding for the Civil Works program, the
    highest budget ever proposed for the Civil Works program.
        The fiscal year 2010 budget provides critical funding that will
    enable the Corps to continue to contribute to the Nation's efforts to
    revitalize the economy, and restore the environment.
        Question. Is it prudent not to provide funding for projects that
    have been under construction for years?
        Answer. Projects funded through the fiscal year 2010 budget are the
    highest performing projects in their respective categories, and it is
    important to fund these projects as efficiently as possible.
        Question. What are we supposed to tell the project sponsors that
    are sharing in the costs of these projects?
        Answer. The administration has made funding decisions based on the
    performance of the projects. As the higher performing projects are
    funded to completion, opportunities to consider other projects will
    expand.
        Question. It will cost them more. It will cost us more. Again, how
    is this prudent?
        Answer. By focusing available funding on the highest performing
    projects in their categories, those projects can be completed more
    efficiently and their benefits brought on line sooner.
                                     ______

               Questions Submitted by Senator George V. Voinovich

        Question. Should the Great Lakes Navigation System be funded as a
    ``system'' the way the Mississippi River System is?
        Answer. The Great Lakes projects are individually authorized and
    are considered coastal projects. While there is some interdependence of
    the Great Lakes ports and harbors on each other, the Great Lakes system
    is non-linear and many Great Lakes ports and harbors can operate
    independent of other harbors. Conversely, the inland navigation
    facilities on the Mississippi River, Ohio River, and other inland
    waterways are linear and interdependent on each other, and a single
    closure in the system will stop all traffic. For other than short-haul
    movements, the commercial towing vessels must transit through many
    locks and dams to move from the point of origin to the destination
    point and all the inland navigation infrastructure along the way must
    be functional for the trip to occur.

                   THE AMERICAN RECOVERY AND REINVESTMENT ACT

        Question. It is my understanding that the Corps used ``geographic
    diversity'' when allocating stimulus funds. However, the Great Lakes
    region, encompassing eight States, received only 2 percent of the $4.6
    billion in civil works funding. Can you explain?
        Answer. The geographic diversity element was considered in the
    sense that the entire United States was canvassed for projects. ARRA
    projects are funded in 49 States, the District of Columbia, and Puerto
    Rico.
        When the bill was enacted, the USACE received $4.6 billion in
    American Recovery and Reinvestment Act (ARRA) funds in six different
    appropriation accounts. Each account has a purpose directed in statute
    and ARRA funding was directed or otherwise targeted to account
    capability. The projects selected represent a set of productive
    investments that will contribute to economic development and aquatic
    ecosystem restoration. The Civil Works projects will further these
    Recovery Act stated purposes of preserving and creating jobs and
    promoting recovery as well as to invest in transportation,
    environmental protection and other infrastructure that will provide
    long term economic benefits.
        The Corps followed the Recovery Act's guidance which included
    commencing expenditures and activities as quickly as possible
    consistent with prudent management. The Corps made its allocation of
    Recovery Act construction funds based on the economic and environmental
    return of its ongoing projects. The projects will achieve the purposes
    of the Recovery Act to commence expenditures quickly by investing in
    infrastructure that will provide long term economic and environmental
    benefits to the Nation. Moreover, the projects are fully consistent
    with the President's direction to ensure that Recovery Act funds are
    spent responsibly and transparently.
        The projects also meet the five criteria enumerated in the
    Congressional report accompanying the Recovery Act, namely that the
    projects:
      --Be obligated/executed quickly;
      --Result in high, immediate employment;
      --Have little schedule risk;
      --Be executed by contract or direct hire of temporary labor; and
      --Complete a project phase, a project, an element, or will provide a
            useful service that does not require additional funding.
                                     ______

          Questions Submitted to Lieutenant General Robert Van Antwerp
                 Question Submitted by Senator Mary L. Landrieu

        Question. A large amount of goods move in and out of our Nation's
    ports, and these ports play a vital role in our Nation's economy.
    Louisiana has some of the largest and most critical ports in our entire
    Nation. Navigable and safe ports are also essential to our Nation's
    security. Do you think the Army Corps of Engineers should take national
    security into account when it prioritizes funding for operations and
    maintenance projects? How will this new administration ensure that our
    ports are secure and maintained for this critical commerce?
        Answer. The impacts of a potential waterway closure due to loss of
    channel dimensions and/or lock/structure failure and its criticality to
    the navigation infrastructure are considered and weighted along with
    economic, environmental, safety, and industry impact factors. In
    addition, as a response to the Maritime Transportation Security Act of
    2002, Corps locks were assessed for criticality and risk reduction to
    infrastructure and security upgrades were implemented at critical locks
    and maintained through project operations and maintenance funds.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

                              CIVIL WORKS PROGRAM

        Question. In your role as the Chief of Engineers, what do you see
    as the major water resource challenges facing this Country in the
    future.
        Answer. Some of the major challenges are in the area of developing
    new strategies to operate and manage existing water infrastructure in a
    sustainable manner that not only meets the Nation's contemporary water
    resources needs, but also adapts to changing conditions such as climate
    change and demographic shifts to ensure such resources are available
    for future generations. Competing water uses must be balanced to
    provide multiple benefits such as economic security, environmental
    health, social well-being, and public safety. For example, navigation
    projects must be designed and operated to not only safely and
    efficiently convey vessels and cargo to ports and waterways, but do so
    in an environmentally responsible manner. Flood risk management
    projects must simultaneously reduce flood risks and sustain healthy
    ecosystems. To address these competing demands, the Corps is beginning
    to undertake a new overarching strategy called Integrated Water
    Resources Management, which seeks to foster equitable, efficient
    management and sustainable use of water. There is much work to be done
    but it will lead to significant gains in these areas.
        Question. What level of funding would be necessary to maintain the
    progress realized in the Civil Works Program through the enacted
    appropriations levels for the past couple of years?
        Answer. This is truly a difficult and challenging question, in this
    time of significant funding for the Corps of Engineers Civil Works
    program. The Corps is currently working with over $20 billion that have
    been provided through a variety of appropriations, including not only
    regular Energy and Water appropriations, but also the American
    Reinvestment and Recovery Act and emergency supplemental funding. That
    is an unprecedented amount of money for the Corps of Engineers.
        Question. If the administration's budget proposal is enacted, what
    will be the impact on meeting the Army Corps' O&M backlog? The
    construction backlog?
        Answer. The fiscal year 2010 budget does not reduce the magnitude
    of the O&M and construction backlog. However, the budget is the
    appropriate mix of Construction and O&M funding and will enable the
    Corps to meet essential construction, operation, maintenance, and
    rehabilitation requirements in the Civil Works program. The O&M backlog
    and the Construction backlog do not represent a prioritization of work
    within either of the two accounts or between the accounts. The priority
    of work in the backlog varies widely.
        Question. What is the percentage of the Nation's commerce that come
    into or leaves this Country that goes through a Corps built and
    maintained harbor?
        Answer. The Corps of Engineers has 299 deep draft coastal harbor
    channels. Virtually all the waterborne cargo passes through a Corps
    navigation project, and anecdotal evidence indicates the vast majority
    of all import and export commerce passes through them. The Corps of
    Engineers doesn't track waterborne commerce in a way that enables me to
    provide a more specific answer to your question.
        Question. Could you characterize the proportion of the
    discretionary budget of the Federal Government that is directed toward
    building and maintaining this Country's water infrastructure today
    versus 30 years ago?
        Answer. Multiple agencies, including the Department of the Interior
    (Bureau of Reclamation), were provided resources for building and
    maintaining the Nation's water infrastructure. The Corps of Engineers,
    in fiscal year 1979, was provided 1 percent of the discretionary budget
    of the Federal Government for civil works projects and programs.
        In fiscal year 2009, 1.07 percent of the Federal Government's
    discretionary budget was provided for the Corps of Engineers. However,
    given the magnitude of changes in the Nation and in Federal programs,
    it is not clear that these percentages are meaningful.
        Question. Could you provide a historical perspective on the value
    of the Nation's inland waterways for national security and economic
    security?
        Answer. Navigation has been very important to national security and
    economic security for over 200 years. The benefits of navigation accrue
    to the Nation as a whole, with 31 States directly served by the 12,000
    mile commercial inland waterways. This helps to explain the major
    Federal interest in our Inland Marine Transportation System (IMTS).
        The IMTS is a major transportation mode and the Nation's industrial
    and agricultural sectors would be profoundly affected without an
    efficient, effective and safe Inland Marine Transportation System. The
    waterway system annually handles well over 600 million tons of cargo
    valued at over $112 billion. This includes energy commodities such as
    coal; petroleum and related products; construction materials; grain and
    other farm products, which move by waterways to ports for export;
    industrial and agricultural chemicals; forest products; and
    manufactured goods.
        The waterways play an important role is the movement of military
    equipment, supplies, fuel, and many defense-related raw materials and
    finished products. Over the years since World War II the use of the
    waterway system for national security purposes has shifted from rapid
    mobilization to a more lengthy mobilization. The waterway system now
    plays a role in the long-term or advance movement of military supplies,
    cargo, equipment, fuel, and industrial materials. With a longer
    mobilization scenario there is increased consideration of civil and
    industrial as well as military transportation needs. The interpretation
    of national defense transportation needs now includes three components:
    traditional military mobility, industrial mobility to support a
    conflict, and support for a mobilized civil economy. This paradigm
    places additional emphasis on the use of the inland waterways.
        Question. How much unobligated funding did the Corps carry over
    from fiscal year 2008 to fiscal year 2009?
        Answer. Unobligated funding carried over in the accounts receiving
    annual appropriations is as follows.

                            [In millions of dollars]
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Investigations.............................................         92
    Construction...............................................      1,461
    Operation & Maintenance....................................        432
    Mississippi River and Tributaries..........................         95
    Formerly Utilized Sites Remedial Action Program............          5
    Flood Control and Coastal Emergency........................      3,516
    Regulatory Program.........................................         12
    Expenses...................................................          1
                                                                ------------
          TOTAL................................................      5,614
    ------------------------------------------------------------------------

        These figures do not include funds appropriated in Public Law 110-
    252 and not available for until fiscal year 2009, or funds appropriated
    in Public Law 110-329 that were not available until fiscal year 2009.
        Question. To what do you attribute this large carryover?
        Answer. About $4.4 billion of the total is supplemental funds
    appropriated to respond to emergency events. Often, obligations for
    project repairs and restoration activities following emergency events
    extend beyond the fiscal year in which the emergency events occur. In
    particular, about $3.5 billion of the supplemental funds carried over
    are Construction funds and Flood Control and Coastal Emergency funds
    being used in the program to protect the New Orleans metropolitan area,
    which is scheduled for completion in fiscal year 2011.
        About $1.2 billion is regularly appropriated funds being carried
    over on a variety of projects. This level of carryover is not
    unexpected, given that funds by and large are remaining on the projects
    for which they were provided, with minimal reprogramming compared to
    years before fiscal year 2006.
        Question. Do you anticipate another large carry over balance from
    fiscal year 2009 to fiscal year 2010?
        Answer. In fiscal year 2009 the Corps received, in addition to
    regular appropriations of $5.4 billion, supplemental funding of $9.3
    billion under Public Laws 110-252, 110-329, and 111-32, plus $4.6
    billion of funding under the American Recovery and Reinvestment Act,
    2009, Public Law 111-5. Of the supplemental funding, $5.8 billion is
    for the New Orleans metropolitan area, and much of the rest is for
    repairs and restoration activities that can extend into fiscal year
    2010.
        In addition, just under one-half of the Recovery Act funding will
    be obligated in fiscal year 2009. Therefore, there will be significant
    carryover into fiscal year 2010.
                                     ______

               Questions Submitted by Senator George V. Voinovich

                                  GREAT LAKES

        Question. The Corps has dredged at less than the ``break-even''
    line for virtually every year in the last decade for the Great Lakes.
    The only year, fiscal year 2008, in the last decade when the Corps
    dredged above the break-even point occurred because Congress added
    significant funding for that purpose. The Corps responded with a
    proposed administration Great Lakes budget for fiscal year 2009 that
    drastically cut the enacted amount. Please explain why there is so much
    resistance to dredging at or above the break-even point? Is it common
    in other regions to hit the break-even level of dredging only
    occasionally over an extended period of years?
        Answer. The President's fiscal year 2010 budget for navigation
    Operation and Maintenance for the Great Lakes is a $4 million increase
    over the fiscal year 2009 program. Competition for Federal funds is
    very keen and gets tighter each year. Our Operation and Maintenance
    (O&M) funding requirements continue to grow as the infrastructure ages,
    newly constructed projects are added to our inventory, and costs
    increase. The Corps budgets for many worthwhile operation and
    maintenance needs across the entire spectrum of Civil Works projects by
    prioritizing projects based on maximizing benefits. In navigation, the
    focus is on harbors and waterways that have high volumes of commerce.
        Question. The 2008 Army Corps document, Great Lakes Navigation
    System: Economic Strength to the Nation, describes the Great Lakes as
    having a dredging backlog that has ``grow[n] to an unprecedented level
    in major navigation channels and harbors.'' How can the Corps ever
    address the estimated $200 million Great Lakes dredging backlog when
    the Corps keeps dredging at less than the break-even level?
        Answer. The Corps has not been able to keep pace with annual
    channel sedimentation and within a relatively short period (e.g., 5
    years) cannot address prior years' accumulations (backlog) under
    historical funding levels. In fiscal year 2008 the Corps reduced the
    backlog in dredging quantity from 18 million cubic yards to 17 million
    cubic yards. Once the Corps completes the dredging funded by the fiscal
    year 2009 Omnibus and Recovery Act appropriations, the backlog will be
    reduced to 15.3 million cubic yards. These appropriations enabled us to
    address the backlog dredging needed to move toward a high performing
    Navigation system.
        The Corps could address the dredging backlog by planning other
    possible alternative control measures including higher efficiencies and
    a Demonstration Regional Commercial Efficiency Dredging Program. While
    the Corps always seeks to execute our programs in the most efficient
    manner possible, efficiencies addressing the dredging process are
    currently under review. For example, working with the States and other
    agencies toward less restrictive environmental windows to increase the
    time available to dredge in particular harbors will help reduce costs.
    The Corps plans to work with dredging contractors to find ways to
    reduce costs and plan to work with States to explore reducing
    restrictions on open water disposal and thus reduce filling rates for
    expensive Confined Disposal Facilities.
        The Corps will renew emphasis on beneficial use of dredged material
    and to open a dialog with State agencies for a scientifically-driven
    review of open water disposal policies to ensure that the environmental
    protections are achieved at the least cost to the taxpayers. A
    technical plan ``Demonstration Regional Commercial Efficiency Dredging
    Program'' using highly efficient, more technically advanced equipment
    to augment the typical annual dredging process will be prepared. This
    is the most promising prospective remedial action to address the
    dredging backlog but must be worked in concert with the other potential
    efficiency improvements. Solutions will be planned considering other
    competing national needs which have historically challenged resourcing
    backlog projects in the Great Lakes; however our goal is unwavering to
    meet the needs of waterborne commerce on the Great Lakes by making
    steady progress in reducing the dredging backlog.
        Question. Does the Corps consider the ``source of funds'' when
    making budget decisions? For example, shouldn't a project funded by
    industry via the Harbor Maintenance Trust Fund receive a higher
    priority than one funded by the taxpayers or cost shared by the
    taxpayer? Why doesn't the Corps spend what it collects from the Harbor
    Maintenance Trust Fund on eligible projects?
        Answer. The Corps of Engineers has a number of cost-sharing
    authorities for the Civil Works program. The source of funds is just
    one of many factors considered in the budget development process. The
    Corps of Engineers' overall Operation and Maintenance (O&M) program is
    prioritized for all missions, including navigation, flood risk
    management, hydropower, etc. Funding is budgeted for the diverse Civil
    Works missions based on various metrics and priorities within available
    resources,. and other critical mission areas would be adversely
    impacted if the funding for those activities were reduced to
    accommodate additional funding for HMTF funded activities.
        Question. The Corps uses different metrics to prioritize projects.
    Would it make sense to use the same metric for all parts of the
    country? Would transportation rate savings be a more appropriate metric
    than tons or ton-miles? Should the same metric be used for domestic
    transportation systems and a different metric for import/export
    systems? Should all tons be treated equally or should a domestic ton
    that creates value for Americans on both ends of the trip be treated
    differently from one that imports products while exporting jobs.
        Answer. Harbors and waterways are vital components of the Nation's
    transportation system. The Corps funds many worthwhile maintenance
    needs across the entire spectrum of Corps of Engineers Civil Works
    projects by prioritizing projects based on maximizing benefits. In
    navigation, the focus is on harbors and waterways that have high
    volumes of commerce. Funding is also based on other factors,
    particularly those that serve as critical harbors of refuge,
    subsistence harbors, facilitate U.S. Coast Guard search and rescue
    operations, supply energy needs to communities, and those that play an
    important role in national security and defense. The Corps is
    developing the necessary tools to use a risk-informed, asset management
    based approach to prioritizing funding and to evaluate the Federal
    return on investment. These tools will help in making better funding
    decisions than tons or ton-miles. In the mean time, the approach
    outlined above assists in making the best use of constrained resources
    and provides for commercial goods to reach the market and contribute to
    the economic well being of the Nation.
                                     ______

                 Questions Submitted to Hon. Michael L. Connor
                 Questions Submitted by Senator Byron L. Dorgan

                                  RURAL WATER

        Question. In prior years I have talked about the drought situation
    in the West particularly as it relates to North Dakota. As we know,
    that is not the situation this year. However, can you talk about the
    drought situation in the West and what we should expect based on
    current models?
        Answer. Without significant snow pack or substantial rainfall,
    current drought conditions are expected to continue. Precipitation
    outlooks are generally unreliable beyond 3 months, and Reclamation
    itself does not forecast weather or drought conditions. Reclamation
    tracks current drought conditions based on information provided by
    other agencies focused on weather, including the National Oceanic and
    Atmospheric Administration's Climate Prediction Center (http://
    www.cpc.noaa.gov/), and the Drought Monitor, managed by the National
    Drought Mitigation Center (http://www.drought.unl.edu/dm/monitor.html).
        Reclamation is working, together with other agencies, to promote
    the development of climate science and tools that will allow us to
    evaluate the impacts of climate change on water supplies. Reclamation
    has formed a Federal Climate Change and Western Water Group (CCAWWG)
    dedicated to providing scientific and research collaboration in support
    of Western water management as climate changes.
        Question. There are a number of projects in the fiscal year 2009
    Energy and Water Act that were not included in the President's fiscal
    year 2010 budget request. Can you provide us the capability amounts
    needed for those projects?
        Answer. All rural water projects are included in the President's
    fiscal year 2010 budget request.
        Question. I am happy to see that you have included all of the
    currently funded rural water projects in your budget. Although some are
    funded at very low levels. How did you arrive at the funding decisions
    for these projects?
        Answer. Rural water projects included in the fiscal year 2010
    President's budget request followed the criteria established by
    Reclamation which first provide for the required O&M component and then
    for projects nearest to completion and projects that serve on-
    reservation needs.
        Question. How are we ever going to make progress on completing
    these projects, at these low budget levels? Inflation is going to
    increase the project cost faster than the funding we are investing.
        Answer. Reclamation is making significant progress in funding rural
    water projects throughout North and South Dakota and Montana. ARRA
    funds in the amount of $200 million were allocated to rural water
    projects. The Mid-Dakota rural water project was completed in fiscal
    year 2006 and Mni Wiconi is scheduled to be completed by 2013.

                                   TITLE XVI

        Question. Title XVI programs are not well supported by the
    administration. Can you explain what the issues are with this program?
    It seems the program would be a good fit with Reclamation's mission of
    bringing water and power to the west.
        Answer. The title XVI Water Reclamation and Reuse Program is an
    important part of Reclamation's mission and is a key element of
    Reclamation's Water Conservation Initiative to address 21st century
    water challenges. Projects funded through the title XVI program enable
    water to be reused, thereby improving efficiency, providing flexibility
    during water shortages, and diversifying the water supply. In addition
    to the fiscal year 2010 request, $135 million of funding under the
    American Recovery and Reinvestment Act of 2009 has been allocated to
    title XVI projects.
        Question. What modifications do you believe could be made to the
    title XVI program that would make it more acceptable to the
    administration?
        Answer. Reclamation recognizes that water reuse is an essential
    tool in stretching limited water supplies in the West. Under the
    President's budget request, the title XVI program will be part of a
    Water Conservation Initiative--along with the Challenge Grant program
    and Basin Study program--to address increasing water demands and
    decreasing water supplies due to extended droughts and climate change.
    Reclamation looks forward to working with the subcommittee to make the
    title XVI program as effective as possible as part of this coordinated
    approach to addressing 21st century water challenges.
        Question. How much of a backlog currently exists in the currently
    authorized title XVI program?
        Answer. There are currently 53 authorized title XVI projects,
    including new projects authorized as a result of the Omnibus Public
    Land Management Act of 2009 (Public Law 111-11).

                              AGING INFRASTRUCTURE

        Question. The recently passed Lands Bill gave Reclamation the
    authority to address rehabilitation of its aging infrastructure. Prior
    to the passage of this legislation this rehabilitation work would have
    been a non Federal responsibility. Recognizing that this is a
    relatively new authority, has Reclamation established guidance for how
    this program is to be implemented?
        Answer. Reclamation is currently developing guidance regarding the
    implementation of this program. Similar programs designed to assist
    Reclamation project beneficiaries in financing the reimbursable costs
    of extraordinary maintenance and rehabilitation work have been
    implemented by Reclamation in the past, and we are drawing on that
    experience in developing implementation guidance.
        Question. Has Reclamation evaluated the condition of this
    infrastructure so that this work could be prioritized in a meaningful
    manner?
        Answer. Reclamation periodically evaluates the condition of its
    facilities through existing review programs. The recommendations
    resulting from the reviews are the basis for prioritization of funding
    for identified needs.
        Question. The language in the lands bill makes this work
    reimbursable over a period not to exceed 50 years. Will this be
    affordable to the non-Federal sponsors that most need this assistance?
        Answer. Current law requires the non-Federal sponsors to pay for
    their allocated portion of this work in advance or repay costs within
    the current year when work is performed. Allowing repayment over a term
    of up to 50 years will greatly ease the burden these entities have
    faced in the past in advancing or repaying the reimbursable costs that
    would be allocated to reimbursable project purposes. Reclamation would
    continue to pay the costs that would be allocated to non-reimbursable
    project purposes. However, given that some of the major repair work
    needed will be very costly, and that interest will be assessed on the
    reimbursable obligations, some project sponsors will still face
    challenges in repaying these costs. It is important to remember that
    non-Federal sponsors, in many cases, are responsible for repaying their
    allocated portions of the capital in addition to operations and
    maintenance costs of the Federal facilities. This law allows more
    flexibility to make payments over time, thereby reducing or minimizing
    long term Federal involvement.
        Question. With much of Reclamation's infrastructure more than 50
    years old, this problem is only going to increase. Has Reclamation
    developed contingencies to address failures of this infrastructure?
        Answer. Assuming that the reference to failures is in the context
    of not being able to continue water deliveries, this would pose a
    public policy question regarding the costs and benefits associated with
    major Federal investment in recapitalizing this infrastructure, as
    addressed in responses to Questions 12 and 13.
        Question. Would a cost shared Federal recapitalization of
    infrastructure that has exceeded its economic life make sense to
    consider?
        Answer. Reclamation believes that the Omnibus Public Land
    Management Act (Public Law 111-11) provides the authority to undertake
    such a program, and plans to consider the appropriateness of funding
    requests to supports these efforts on a project-by-project basis.
        Question. What would be required to establish a program like this
    in Reclamation?
        Answer. In order to establish an effective program to address aging
    infrastructure under the authority of the Omnibus Public Land
    Management Act, Public Law 111-11, Reclamation will need to establish
    procedures for allocating costs among reimbursable and non-reimbursable
    project purposes, set standards for appropriate repayments terms within
    the prescribed limits, and prioritize the use of available funds among
    its many aging facilities.
                                     ______

                  Questions Submitted by Senator Patty Murray

                          ODESSA SUBAREA SPECIAL STUDY

        Question. Commissioner Connor, I am disappointed that the Odessa
    Subarea Special Study, which was included in the fiscal year 2009
    President's budget request, has been eliminated in the fiscal year 2010
    President's budget request. As you know, the Columbia Basin Project is
    a critical tool for farmers in my home State of Washington. Securing a
    reliable surface water supply for the producers is important to
    ensuring the continuation of agriculture in Central Washington while
    protecting our groundwater supplies. Can you tell me why this project
    was eliminated in the President's budget request?
        Answer. Reclamation recognizes the importance of Columbia Basin
    water issues; however, faced with significant competing demands for
    aging infrastructure, satisfying Endangered Species Act regulatory
    requirements on operating projects, and other high priority water
    issues throughout the 17 Western States, no funding was included in the
    fiscal year 2010 President's budget. Reclamation also understands the
    importance, specifically, of the Odessa Subarea Special Study (Study).
    Reclamation has partnered with the State of Washington (State) to
    investigate the possibility of continuing development of the Columbia
    Basin Project to deliver project surface water to lands currently using
    ground water in the Odessa Subarea. Reclamation will continue to work
    with the State to bring the Study to completion as soon as possible.
    The State has identified the declining Odessa Subarea aquifer as the
    highest priority issue to address in the Columbia River Basin. The
    State will continue to fund the study in fiscal year 2010 and fiscal
    year 2011.
        Question. It is my understanding that the environmental impact
    statement analysis of the alternatives identified in the appraisal-
    level investigation is underway, and the State of Washington and the
    Bureau are working together to complete this work. When do you
    anticipate completion of the feasibility study? Are you still on track
    for completion in 2011?
        Answer. Reclamation anticipates that the study may need to be
    extended. Reclamation and the State of Washington Department of Ecology
    (Ecology) are jointly preparing an environmental impact statement (EIS)
    to meet the National Environmental Policy Act and State Environmental
    Policy Act requirements. The draft EIS is currently scheduled for
    release to the public in spring 2010, with the final EIS scheduled for
    spring 2011.
        Question. Now that the appraisal-level investigation has been
    completed and the path forward has become more clear, an increase in
    the annual funding level will be needed to make sure the study is
    completed in a timely fashion. Unlike this year, can we expect to see
    future requests from the Bureau to reflect this?
        Answer. There will be a continued level of commitment from
    Reclamation to complete the study in fiscal year 2011. The State has
    indicated a continued level of commitment in 2010 and 2011.

                     WASHINGTON STATE ARRA FUNDED PROJECTS

        Question. Commissioner Connor, as you know, my State has many ready
    to go construction projects within the Bureau's purview, and as such
    was a beneficiary of Recovery Act funding, which I am thrilled about.
    Can you please provide an update on these projects?
        Answer. We too are pleased that so many worthy projects in the
    State of Washington received Recovery Act funding. The following is an
    update of those projects:
        The following contracts and work have been awarded:
      --Leavenworth National Fish Hatchery Complex--an Indefinite Delivery/
            Indefinite Quantity (IDIQ) task order was awarded for the
            design of a water supply replacement system for the intake
            facility. Amount $780,000.
      --Leavenworth National Fish Hatchery Complex--IDIQ task order was
            awarded for survey work for the repair of the adult holding
            pond. Amount $33,000.
      --Columbia/Snake River Habitat Projects hired a three-person crew to
            work on the Methow Habitat Project Evaluation to meet
            monitoring requirements. Amount $130,000.
        The following contracts are out for solicitation:
      --Roza Roller Gates solicitation was issued with an estimated award
            of early October 2009 and construction projected to begin late
            October 2009. Estimated cost $4.9 million.
      --Weber Siphon Complex solicitation was issued with an estimated
            award of late September 2009 and construction projected to
            begin late October 2009. Estimated cost is $49 million.
      --Potholes Supplemental Feed Route--Pinto Dam and Brooks Lake
            solicitation was issued with an estimated award of mid-
            September 2009 and construction projected to begin mid-October
            2009. Estimated cost is $3.1 million.
      --Grand Coulee Maintenance items have been advertised for bid on E-
            BUY with an estimated award date of mid-August 2009. Estimated
            amount is $890,000.
        The following items are either in the review stage or being
    prepared:
      --Remaining Grand Coulee Maintenance items being reviewed for ARRA
            compliance requirements in our Denver office.
      --Umatilla Project--Modifications and improvements on water delivery
            system being reviewed for ARRA compliance requirements in our
            Denver office.
      --Sunnyside Division Board of Control--the financial assistance
            agreement to the Sunnyside Board of Control for piping three
            large laterals is expected to be signed in mid-September.
      --Columbia/Snake River Habitat Projects--the financial assistance
            agreement to the Methow Salmon Recovery Foundation for two fish
            habitat improvement projects is expected be signed in early
            September.
        Question. As you know, the Bureau owns billions of dollars worth of
    irrigation infrastructure all across the West, and the infrastructure
    is aging and in need of significant investment to maintain efficient
    operation. We have authorized and directed the Bureau to develop a
    Federal loan guarantee program to assist operators of Reclamation
    projects in securing low interest loans to encourage investment in
    Federal infrastructure.
        Can you please tell me the status of this program?
        Answer. This program has not yet been implemented. A proposed rule
    for the program has been published and comments were received. We will
    continue to keep Congress informed about the status of the program.
        Question. Do you think that this program is successful in
    encouraging local project operators to make these kinds of investments
    in our Federal facilities?
        Answer. The program has not been implemented, but we will continue
    to keep Congress informed about its status.
        Question. Are there other ways to encourage this investment?
        Answer. Section 9603 of the Omnibus Public Land Management Act of
    2009 (Public Law 111-11) was enacted to assist Reclamation project
    beneficiaries in paying for extraordinary operation and maintenance
    costs. Public Law 111-11 allows repayment of extraordinary O&M costs
    allocated to the authorized reimbursable purposes of the project within
    50 years, with interest.
                                     ______

                Questions Submitted by Senator Robert F. Bennett

                                 QUAGGA MUSSELS

        Question. Quagga Mussels are becoming more of a problem in western
    waters and are affecting Reclamation projects. How much funding is
    included in Reclamation's budget to address the control of Quagga
    Mussels?
        Answer. In fiscal year 2009, Reclamation-wide appropriated funding
    for addressing the control of invasive mussels (both Quaqqa and Zebra
    mussels) includes just over $2.0 million. This funding encompasses
    activities related to the prevention of spread, early detection and
    rapid response for new infestations, control and management, research,
    and outreach and education. The fiscal year 2010 appropriated budget
    request totals nearly $3.5 million. In addition to appropriated
    funding, there are also direct or contributed funds and in-kind
    services to be provided by various partners and customers estimated to
    be nearly $375,000 and $475,000 in fiscal year 2009 and fiscal year
    2010, respectively. Reclamation also received $4.5 million in ARRA
    funding for monthly testing of 60 Reclamation reservoirs for presence
    of mussel larvae. This activity will continue through 2010.
        Question. What are the costs to Reclamation to deal with Quagga
    Mussels at Reclamation projects?
        Answer. Reclamation is continually working with its regional and
    area offices to consolidate invasive mussel related cost information.
    Appropriated Reclamation funding expenditures in fiscal year 2008 and
    fiscal year 2009 are estimated to total approximately $3.5 million and
    reflect Reclamation-wide costs to deal with invasive mussels to date.
    Future costs are expected to escalate as invasive mussels continue to
    spread throughout Reclamation in the 17 Western States.
        Question. Does Reclamation have a research and development program
    to study Quagga Mussels?
        Answer. Reclamation's Research and Development (R&D) Office has
    made invasive mussels a top priority. Zebra and Quagga mussel research
    under Reclamation's Science and Technology Program was started in 2008
    to address both existing and anticipated mussel impacts at Reclamation
    facilities throughout the Western United States. The emphasis is on
    monitoring, early detection, control, and mitigation to maintain
    Reclamation's water and hydropower operations. The goal is broad
    application of promising facilities protection technologies and
    strategies. Specific investigations seek to improve early detection
    methods, infrastructure coatings to prevent mussel settlement, mussel
    resistant fish screens, use of filters and Ultraviolet (UV) light
    systems, development of a bacterial product (Pseudomonas fluorescens)
    to kill mussels, control using natural predators, addressing post-
    infestation rapid die-off impacts, and assessing mussel impacts in
    river and reservoir environments.
        Question. How much funding has Reclamation included in the fiscal
    year 2010 budget to study these invasive species?
        Answer. Reclamation's fiscal year 2010 R&D Office budget request
    includes $1.49 million for invasive mussel research.

                     DESALINATION RESEARCH AND DEVELOPMENT

        Question. What research and development plans does Reclamation have
    for the Brackish Groundwater National Desalination Research Facility?
        Answer. In general, the work at this facility will focus on
    improvement and testing of technologies for the treatment of inland
    brackish groundwater and disposal of concentrate, with special emphasis
    on the use of renewable energy to drive such processes.
        Research funds for the Brackish Groundwater National Desalination
    Research Facility (BGNDRF), appropriated to Reclamation under the
    Desalination Act of 1979, were earmarked to New Mexico State University
    in fiscal year 2008 ($3.365 million) and fiscal year 2009 ($2.0
    million). For fiscal year 2010, we requested $1.6 million for O&M of
    the BGNDRF, and $2.133 million for research on advanced water treatment
    technologies, some of which will occur at the facility.
        Research to date at BGNDRF has included work with Sandia National
    Laboratories and a private sector company looking at an innovative
    concentrate disposal method and testing of new membranes developed by a
    university through an Office of Naval Research grant. Also underway is
    concentrate disposal testing by Veolia Water and electro-dialysis
    testing with New Mexico State University and General Electric. Other
    projects are in the discussion stages.
        The facility will provide all the requirements for researchers
    working with desalination systems, concentrate management issues,
    renewable energy/desalination hybrids, and rural systems.
        Question. Will the funding budgeted allow for meaningful research
    at the facility?
        Answer. Historically, Reclamation has ensured that research
    appropriations produce the highest quality products by defining the
    research objectives to address the highest-priority questions, and
    funding research through an open, competitive, peer reviewed process.
    These have been the administration's standards for research
    administration.
        This approach will be used to administer research at the BGNDRF
    facility for those appropriations that Reclamation controls. The
    amounts requested in the President's 2010 budget are sufficient to
    undertake important work advancing the treatment of brackish
    groundwaters.
        Reclamation's ability to ensure meaningful research is limited to
    the extent that the funds appropriated for this research are earmarked
    without an open, competitive process.
        Question. What other advanced water treatment options are showing
    promise for impaired groundwater?
        Answer. Many technologies exist to treat a range of brackish
    waters. Reclamation focuses its research on technologies that may
    represent a significant breakthrough in either cost reduction or
    effectiveness of treatment. Currently, two of the most promising
    technologies that Reclamation is developing are: (1) a truly chlorine-
    resistant thin-film composite reverse osmosis membrane that will allow
    pre-treatment with chlorine to prevent bio-fouling without the
    degradation of the membrane, and (2) a more efficient cellulose-
    triacetate membrane that is naturally chlorine resistant. Both
    technologies will likely be tested at the BGNDRF.
        Reclamation is also working with other Government agencies,
    universities, non-profits, and the private sector. Not only are there
    new membrane formulations being created and tested by Reclamation and
    others, innovative work is continuing on the development of cost
    effective concentrate disposal, reduced energy consumption/lower
    CO2 footprint/renewables, reduced fouling, and alternative
    desalination technologies such as forward osmosis, membrane
    distillation, electro-dialysis, thermal technologies and others.
        Question. Do you see any potential for Reclamation becoming
    involved in the construction of desalination plants? Why?
        Answer. Historically, Reclamation has focused upon research and
    development of advanced water treatment technologies up through pilot
    scale testing and demonstration, and moving those technological
    advances to the private sector for commercialization. Given the very
    large global industry around design and construction of desalination
    plants, there does not appear to be a need for Reclamation to enter
    into this domain. However, Reclamation may be able to play a role in
    providing designs or reviewing designs for systems that are not a focus
    of the mainstream design and construction industry, for example for
    small-scale plants that are part of a Reclamation Rural Water project,
    or applications on Indian lands, or applications that are otherwise
    integrated with Reclamation projects.
        Question. You have only budgeted about $500,000 for drought
    assistance in fiscal year 2010. Is that funding sufficient to address
    the drought issues that are anticipated next year?
        Answer. Reclamation prepares its budgets 2 years in advance.
    Consequently, we are unable to forecast this kind of emergency.
    However, we make every effort to address the greatest need with the
    funds available and to put our efforts into funding on-the-ground
    activities.
        The amount requested for Drought Program funding in fiscal year
    2010 is primarily the result of a relatively flat overall budget for
    Reclamation and increasing costs associated with site security, dam
    safety, project rehabilitation, and operation and maintenance, to name
    just a few. Reclamation has many important programs that need to be
    funded, and has made its best effort to develop a budget that
    adequately balances the competing needs for these different programs.
        In addition to the $500,000 requested for drought assistance in
    fiscal year 2010, Reclamation recently announced $40 million in funding
    available under the American Recovery and Reinvestment Act (ARRA) of
    2009 to projects that will address the impacts of drought in
    California. The $40 million in ARRA funding will be used to fund
    drought projects beginning this summer and continuing throughout 2010.
        In addition to our Drought Program, Reclamation also addresses
    competing demands for finite water supplies through the Water
    Conservation Initiative. Reclamation has requested $46 million for the
    Water Conservation Initiative in 2010, which includes funding for the
    title XVI, Challenge Grant, and Basin Study Programs.
        Question. In the fiscal year 2010 budget, the rural Water Program
    authorized in 2006 appears to be finally getting out of the evaluation
    and rule making phase into actually starting to address the water needs
    in western States. Can you update us on the status of this program?
        Answer. The Rural Water Supply Act required that the Department of
    the Interior develop programmatic criteria for the new program and
    publish them in the Federal Register through a rulemaking process. In
    November 2008, the Department published an interim final rule (Rule)
    establishing comprehensive programmatic criteria governing eligibility,
    the prioritization of projects for funding, and the evaluation of
    studies completed under the program. The Rule became effective on an
    interim basis on December 17, 2008, and the 60-day public comment
    period ended on January 16, 2009. The Rule will be implemented upon
    completion of a set of guidelines or internal directives (``Directives
    and Standards'') describing how the program will be implemented by
    Reclamation. The Directives and Standards will describe key aspects of
    program implementation, such as how Reclamation will receive and review
    applications, how Reclamation will review completed studies, and will
    specify the required content of appraisal and feasibility studies
    completed or reviewed under the program. By establishing uniform
    requirements for program implementation, the Directives and Standards
    will help ensure that the program is implemented consistently,
    effectively and transparently across the organization.
                                     ______

                       Questions Submitted to Reed Murray
                Questions Submitted by Senator Robert F. Bennett

        Question. Mr. Reed, The budget for CUPCA is flat when compared to
    fiscal year 2009. Is this funding level sufficient to continue to make
    progress on this critical project?
        Answer. The President's 2010 budget for CUPCA is sufficient to
    continue CUP construction and implementation of CUP mitigation and
    conservation activities.
        Question. What is your total funding capability for CUPCA in fiscal
    year 2010?
        Answer. The President's 2010 budget for CUPCA represents the
    funding capability of the CUPCA program.
        Question. What will this additional capability accomplish?
        Answer. Since the President's 2010 budget represents the CUPCA
    programs funding capability the CUPCA budget justification documents
    adequately describe the proposed 2010 accomplishments.

                              SUBCOMMITTEE RECESS

        Senator Dorgan. This hearing is recessed.
        [Whereupon, at 11:50 a.m., Thursday June 18, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2010

                                  ----------

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--At the direction of the subcommittee
    chairman, the following statements received by the subcommittee
    are made part of the hearing record on the Fiscal Year 2010
    Energy and Water Development Appropriations Act.]

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

             Prepared Statement of the Red River Valley Association
        Mr. Chairman and members of the subcommittee, I am Wayne Dowd,
    President, and pleased to represent the Red River Valley Association,
    629 Spring St., Shreveport, Louisiana. Our organization was founded in
    1925 with the express purpose of uniting the citizens of Arkansas,
    Louisiana, Oklahoma and Texas to develop the land and water resources
    of the Red River Basin.
        The Resolutions contained herein were adopted by the Association
    during its 84th Annual Meeting in Shreveport, Louisiana, on February
    19, 2009, and represent the combined concerns of the citizens of the
    Red River Basin area as they pertain to the goals of the Association. A
    summary of the civil works projects and requested funding is included
    in this testimony.
        The President's fiscal year 2010 budget included $5.1 billion for
    the civil works programs. It is $350 million more than proposed in
    fiscal year 2009 and $300 million less than what Congress enacted in
    the fiscal year 2009 Omnibus bill, $5.4 billion. The problem is also
    how the administration distributes funds. A few projects received the
    full ``Corps Capability'' to the detriment of many projects that
    receive no funding. Even though this is one of the largest
    administrative budgets, the $5.1 billion level does not come close to
    the real needs of our Nation. A more realistic funding level to meet
    the existing needs of the civil works program is $8 billion for fiscal
    year 2010. The traditional civil works programs remain at the low,
    unacceptable level as in past years. These projects are the backbone to
    our Nation's infrastructure for waterways, flood prevention, water
    supply and ecosystem restoration. We remind you that civil works
    projects are a true ``jobs program'' in that up to 85 percent of
    project funding is contracted to the private sector; 100 percent of the
    construction, as well as much of the architect and engineering work.
    Not only do these projects provide jobs, but provide economic
    development opportunities for our communities to grow and prosper,
    creating permanent jobs.
        We want to point out that we appreciate the funding Congress
    enacted in the fiscal year 2009 Omnibus Bill; however, it is $200
    million less than appropriated in fiscal year 2008. We encourage
    Congress to increase the ``water'' share of the total Energy and Water
    bill closer to 20 percent to reach the $8 billion capability.
        Another proposal allocates O&M funding by watershed regions and
    eliminates funding by individual project. We do not accept this concept
    since you will loose ownership and identity of each project; therefore,
    lose grass root support. If this was done, due to reprogramming
    constraints, then reprogramming should be addressed. Major
    reprogramming issues are with CG projects, not with O&M projects. Fund
    O&M by project, not watershed basins.
        We have great concerns over the issue of ``earmarks''. Civil Works
    projects are not earmarks! Civil Works projects go through a process;
    reconnaissance study, feasibility study, benefit to cost ratio test,
    EIS, peer review, review by agencies, public review and comment, final
    Chief of Engineer approval, authorization by all of Congress in a WRDA
    bill and signed by the President. WRDA 2007 added an independent review
    of major projects. No other Federal program goes through such a
    rigorous approval process. Each justified project ``stands alone'', are
    proven to be of national interest and should be funded by project. For
    most projects there is local sponsor cost sharing during the
    feasibility study, construction and for O&M. Those who have
    contributed, in most cases--millions of dollars--to the process, must
    have the ability to have a say for their projects to get funded. That
    voice is through their Congressional delegation. We believe that
    earmarks are not in the national interest, but it does not pertain to
    the civil works program. For civil works it is an issue of priority of
    projects to be funded and who will determine that, OMB or Congress! We
    hope Congress keeps their responsibility to set civil works priorities
    and to determine how its citizen's tax dollars are spent.
        The President's budget proposes eliminating the current fuel tax to
    fund the Inland Waterways Trust Fund (IWTF) and replace it with a barge
    lock-use fee. This change creates an unfair tax to industries on
    waterways with locks versus waterways without locks. The needs of the
    IWTF should be analyzed and determine what increase to the existing
    fuel tax would maintain the necessary income flow to keep projects
    funded from the Inland Water Trust Fund. The lockage fee proposal is
    unfair to tributary waterways with locks and we request it not be
    implemented.
        I would now like to comment on some of our specific requests for
    the future economic well being of the citizens residing in the four
    State Red River Basin regions. It is noted that at the time for
    testimony submission the details of the President's fiscal year 2010
    budget have yet to be released.
        Navigation.--The J. Bennett Johnston Waterway is living up to the
    expectations of the benefits projected. We are extremely proud of our
    public ports, municipalities and State agencies that have created this
    success. This upward ``trend'' in usage will continue as new industries
    commence operations. A major power company, CLECO, is investing $1
    billion in its Rodemacher Plant near Boyce, Louisiana, on the lower Red
    River and has started moving over 3 million tons of ``petroleum coke''
    and limestone, by barge, in the 4th quarter 2008. These projects are a
    reality and there are many more industries considering using our
    Waterway.
        You are reminded that the Waterway is not complete, 6 percent
    remains to be constructed, $121 million. We appreciate Congress'
    appropriation level in fiscal year 2009 of $7,656,000. There is a
    capability for $21 million of work, but we realistically request $12
    million to keep the project moving toward completion, ``J. Bennett
    Johnston Waterway (CG)''.
        Now that the J. Bennett Johnston Waterway is reliable year round we
    must address efficiency. Presently a 9-foot draft is authorized for the
    J. Bennett Johnston Waterway. All waterways below Cairo, Illinois are
    authorized at 12-foot, to include the Mississippi River, Atchafalaya
    River, Arkansas River and Gulf Intracoastal Waterway. A 12-foot channel
    would allow an additional one-third capacity, per barge, which will
    greatly increase the efficiency of our Waterway and further reduce
    transportation rates. This one action would have the greatest, positive
    impact to reduce rates and increase competition, bringing more
    industries to use waterborne transportation. We request a 1-year
    reconnaissance study be funded to evaluate this proposal, at a cost of
    $100,000. Fact: Approximately 95 percent is already at 12-foot year
    round.
        The feasibility study to continue navigation from Shreveport-
    Bossier City, Louisiana, into the State of Arkansas will be completed
    in CY 2010. This region of SW Arkansas and NE Texas continues to suffer
    major unemployment and this navigation project, although not the total
    solution, will help revitalize the economy. Due to the time lapsed in
    the study the ``freight rates'' calculated a number of years ago they
    must be re-evaluated this year. We request funding of $100,000 to
    conduct the re-evaluation of freight rates, ``Navigation into SW
    Arkansas''.
        Flood Prevention.--What will happen when we ignore our levee
    systems? We know the Red River levees in Arkansas do not meet Federal
    standards, which is why we have the authorized project, ``Red River
    Below Denison Dam, TX, AR & LA''. Now is the time to bring these levees
    up to standards, before a major flood event, which will occur.
        We continue to consider flood control a major objective and request
    you continue funding the levee rehabilitation projects ongoing in
    Arkansas. Five of 11 levee sections have been completed and brought to
    Federal standards.
        The levees in Louisiana have been incorporated into the Federal
    system; however, they do not meet current safety standards. These
    levees do not have a gravel surface roadway, threatening their
    integrity during times of flooding. It is essential for personnel to
    traverse the levees during a flood to inspect them for problems.
    Without the gravel surface the vehicles will cause rutting, which can
    create conditions for the levees to fail. A gravel surface will insure
    inspection personnel can check the levees during the saturated
    conditions of a flood.
        Appropriations of $15 million will construct one more levee section
    in Lafayette County, AR and continue the rock surfacing of levees in
    Louisiana, ``Red River Below Denison Dam, AR & LA''.
        Bank Stabilization.--One of the most important, continuing
    programs, on the Red River is bank stabilization in Arkansas and North
    Louisiana. We must stop the loss of valuable farmland that erodes down
    the river and interferes with the navigation channel. In addition to
    the loss of farmland is the threat to public utilities such as roads,
    electric power lines and bridges; as well as increased dredging cost in
    the navigable waterway in Louisiana. These bank stabilization projects
    are compatible with subsequent navigation into Arkansas and we urge
    that they be continued in those locations designated by the Corps of
    Engineers to be the areas of highest priority. We appreciated the
    Congressional funding in past fiscal years and request you fund this
    project at a level of $11 million in fiscal year 2010, ``Red River
    Emergency Bank Protection''.
        Water Quality.--The Assistant Secretary of the Army (Civil Works),
    in October 1998, agreed to support a re-evaluation of the Wichita River
    Basin tributary of the project. The re-evaluation report was completed
    and the Director of Civil Works signed the Environmental Record of
    Decision. The plan was found to be economically justified. Then the ASA
    (CW) directed that construction would not proceed until a local sponsor
    was found to assume 100 percent of the O&M for the project. The 2007
    WRDA bill included language that clarified that all aspects of this
    project will be at full Federal expense, to include O&M.
        Over the past years there has been a renewed interest by the
    Lugart-Altus Irrigation District to evaluate construction of Area VI,
    of the Chloride Control Project, in Oklahoma. They have obtained the
    support of many State and Federal legislators, as well as a letter from
    the Oklahoma Governor in support of a re-evaluation report.
        Total request for the ``Chloride Control Project'': $9,000,000 for
    the Texas and Oklahoma areas.
        Water Supply.--Lake Kemp, just west of Wichita Falls, TX, is a
    major water supply for the needs of this region. Due to siltation the
    available storage of water has been impacted. A reallocation study is
    needed to determine water distribution needs and raising the
    conservation pool. Total O&M of $664,000 is requested for fiscal year
    2010 ($214,000 is required for the base annual O&M, $300,000 for the
    study and $150,000 for service bridge and gate repair).
        A water re-allocation study has been completed for Lake Texoma. It
    will provide for an additional 600,000 acre-feet for municipal use. The
    release of the study has been delayed at the Corps HQ for over a year.
    Congress needs to request that this re-allocation study be approved and
    released.
        Studies.--We have a number of General Investigation (GI) studies
    that have been funded and have local sponsors prepared to cost share
    feasibility studies. Some of those important studies include: Bossier
    Parish Flood Control Study, LA--$350,000; Cross Lake Water Supply
    Study, LA--$100,000; SE Oklahoma Water Resource Study, OK--$500,000; SW
    Arkansas Study, AR--$100,000; Washita River Basin, OK--$500,000 and
    Wichita River Basin, TX--$100,000. These studies are important to have
    projects ready for future construction.
        Operation & Maintenance.--Full O&M capability levels are not only
    important for our Waterway project but for all our Corps projects and
    flood control lakes. The backlog of critical maintenance only becomes
    worse and more expensive with time. The ``2007 Summer Flood of Record''
    was devastating to the recreation industry at Lake Texoma, on the main
    stem Red River, as well as a number of other Oklahoma lakes. We urge
    you to appropriate funding to address this serious issue, either
    through an emergency supplemental or the appropriation bill. We request
    that the Corps O&M projects be funded at the expressed, full Corps
    capability.
        American Recovery and Reinvestment Act of 2009.--The original
    administrative submission did not include civil works funding. We want
    to thank Congress for including $4.6 billion in the ``stimulus''
    package for civil works projects, especially in the O&M account. These
    additional funds will be important to address our long list of backlog
    needs.
        Thank you for the opportunity to present this testimony and project
    details of the Red River Valley Association on behalf of the
    industries, organizations, municipalities and citizens we represent
    throughout the four State Red River Valley region. The Civil Works
    program directly relates to national security by investing in economic
    infrastructure. If waterways are closed companies will not relocate to
    other parts of the country--they will move over seas. If we do not
    invest now there will be a negative impact on our ability to compete in
    the world market threatening our national security.

                      RED RIVER VALLEY ASSOCIATION FISCAL YEAR 2010 APPROPRIATIONS--CIVIL WORKS \1\
                                                 [Dollars in thousands]
    ----------------------------------------------------------------------------------------------------------------
                                               Fiscal Year     RRVA Fiscal      President
                                               2009 Approp      Year 2010      Fiscal Year        Local Sponsor
                                                 Omnibus         Request      2010  Budget         Requirements
    ----------------------------------------------------------------------------------------------------------------
    Studies (GI):
        Navigation into SW Arkansas:         ..............            $100  ..............  (ARRC)
         Feasibility.
        Red River Waterway, LA-12' Channel,  ..............             100  ..............  (RRWC)
          Recon.
        Bossier Parish, LA.................            $191             350  ..............  (Bossier Levee)
        Cross Lake, LA Water Supply                     229             100  ..............  (Shreveport)
         Supplement.
        SE Oklahoma Water Resource Study:               311             500  ..............  (OWRB)
         Feasibili-  ty.
        SW Arkansas Ecosystem Restoration:              143             184  ..............  (?)
         Recon Study.
        Cypress Valley Watershed, TX.......  ..............             100  ..............  (?)
        Sulphur River Basin, TX............  ..............           1,000  ..............  (Sulphur Auth)
        Washita River Basin, OK............             191             500  ..............  (L)
        Wichita River Basin above Lake       ..............             100  ..............  (L)
         Kemp, TX: Recon.
        Red River Above Denison Dam, TX &    ..............             100  ..............  (L)
         OK:  Recon.
        Red River Waterway, Index, AR to     ..............              44  ..............  (?)
         Denison  Dam.
        Mountain Fork River Watershed, OK &  ..............  ..............  ..............  (?)
         AR, Recon.
        Walnut Bayou, Little River, AR.....  ..............             100  ..............  (ANRC)
        Red River Waterway, Index to         ..............  ..............  ..............  (?)
         Denison, Bendway Weir.
    Construction General (CG):
        Red River Waterway: J.B. Johnston             7,656          21,000  ..............  (RRWC)
         Waterway, LA.
        Chloride Control Project, TX & OK..           2,201           9,000  ..............  N/A
        Red River Below Denison Dam; AR &             2,105          11,000  ..............  (Levee Districts)
         LA.
            Bowie County Levee, TX.........  ..............  ..............  ..............  (Levee Districts)
        Red River Emergency Bank Protection           2,817          15,000  ..............  (Levee Districts)
        Big Cypress Valley Watershed, TX:    ..............           1,450  ..............  (Jefferson)
         section 1135.
        Palo Duro Creek, Canyon, TX:         ..............             100  ..............  (Canyon, TX)
         section 205.
        Millwood, Grassy Lake, AR: section          ( \2\ )             350  ..............  (?)
         1135.
        Little River County/Ogden Levee,     ..............             300  ..............  (ASWC)
         AR, PED.
        McKinney Bayou, AR, PED............  ..............  ..............  ..............  .......................
        Miller County Levee, AR, section     ..............  ..............  ..............  (Miller Levee)
         1135.
    Operation and Maintenance (O&M):
        J. Bennett Johnston Waterway, LA...           9,797          16,230  ..............  .......................
        Lake Kemp, TX--Total Need..........             198             664  ..............  .......................
            Basic Annual O&M...............  ..............             214  ..............  .......................
            Reallocation Study.............  ..............             300  ..............  .......................
            Service Bridge & Gate Repair...  ..............             150  ..............  .......................
        Lake Texoma, TX & OK--Total Need...           6,164           9,393  ..............  .......................
            Basic Annual O&M...............  ..............           6,393  ..............  .......................
            Suppl. EIS.....................  ..............           1,000  ..............  .......................
            Backlog Maintenance............  ..............           2,000  ..............  .......................
        Chloride Control Project, TX & OK..           1,348           5,824  ..............  .......................
    ----------------------------------------------------------------------------------------------------------------
    \1\ Depending on final Stimulus funding RRVA fiscal year 2010 requests may change. Details of the President's
      fiscal year 2010 budget have NOT yet been released.
    \2\ YES.

    NOTE: Local Sponsor Column--Sponsor indicated in ( ); (?) indicates No Sponsor identified and need one to
      continue (L) indicates Sponsor not required now but need one for feasibility; N/A--No Sponsor required.

                                     ______

                  Prepared Statement of The Nature Conservancy

        Mr. Chairman and the members of the subcommittee, thank you for the
    opportunity to present The Nature Conservancy's recommendations for
    fiscal year 2010 appropriations for the U.S. Army Corps of Engineers
    (Corps) and Bureau of Reclamation.
        The Nature Conservancy's recommendations represent a priority set
    of efforts that are both individually important and collectively
    designed to demonstrate innovations in restoration to help guide future
    resource allocation. Further, if done well, ecosystem restoration
    projects pay dividends through services such as provision of more
    reliable and higher quality water, natural flood attenuation,
    sustaining commercial fisheries, and supporting economically-important
    outdoor recreation. Moreover, the Nation's resiliency to climate change
    will be substantially dictated by the health of our ecosystems. In
    short, we believe the public investments we are requesting now will pay
    far larger dividends for decades to come.

                         CORPS CONSTRUCTION PRIORITIES

        Continuing Authorities Program.--We thank the subcommittee for
    continuing its strong support of the section 1135: Project
    Modifications for Improvement of the Environment and section 206:
    Aquatic Ecosystem Restoration programs. However, demand for these
    programs continues to outstrip funding. The Conservancy requests that
    the programs be fully funded by appropriating $40 million for section
    1135 and $50 million for section 206.
        The Conservancy seeks funding for two section 1135 projects. The
    Spunky Bottoms project (IL) is a model floodplain restoration and
    reconnection effort on the Illinois River that needs $400,000 to
    complete a feasibility study in fiscal year 2010; the Conservancy is
    the non-Federal cost share partner. Additional dollars will be
    necessary for the planning, specifications, construction and monitoring
    phases, totaling approximately $7.5 million. The Chain Bridge Flats
    project (D.C.) needs $100,000 to complete a reconnaissance report to
    restore a globally rare habitat along the Potomac River.
        The Conservancy also seeks funding for three section 206 projects:
    Emiquon Preserve (IL), a floodplain restoration and reconnection
    project that needs $600,000 to complete a feasibility study, sign a
    project partnership agreement, and begin design; Camp Creek (OR), a
    headwaters stream restoration project that needs $575,000 to sign a PCA
    and complete construction; and Navajo Reservation Implementation (NM),
    which needs $510,000 for restoration on the San Juan River. The
    Conservancy is the cost share partner for Emiquon and Camp Creek.
        We continue to be concerned about the subcommittee's guidance for
    these programs. The prioritization requirements and ``no new starts''
    rule in the fiscal year 2009 report block the implementation of
    important conservation priorities that enjoy strong support from their
    local communities. We urge the subcommittee to adopt a more flexible
    approach. Appropriating the requested amounts will help address the
    backlog in these programs, as will funds from the American Recovery and
    Reinvestment Act.
        Estuary Restoration Program.--The Estuary Restoration Program is a
    national, multi-level, multi-agency strategy to restore our Nation's
    estuaries that benefits fish, shellfish and wildlife; improves surface
    and groundwater resources; provides flood control; and enhances
    recreational opportunities. The Conservancy supports $10 million for
    the Estuary Restoration Program in fiscal year 2010.
        Upper Mississippi River Navigation and Ecosystem Sustainability
    Program.--The Navigation and Ecosystem Sustainability Program (NESP) is
    a dual purpose authority for integrated management of the Upper
    Mississippi River (UMR) system's habitat and navigation facilities. All
    activities implemented under the existing Environmental Management
    Program (EMP) can be transitioned into NESP, but it is critical to fund
    both programs until the transition is complete. While the Corps has the
    capability to execute a $50 million budget for NESP in fiscal year 2010
    for ecosystem restoration and navigation projects, and we support this
    funding level, we also recognize the current budgetary constraints and
    acknowledge that a more realistic NESP fiscal year 2010 new start
    request should be $35 million. The Conservancy also supports $33.2
    million for EMP in fiscal year 2010.
        Missouri River Fish and Wildlife Recovery Program (MRRP).--Under
    this program, the Corps has completed 30 projects in the lower Missouri
    basin States to assist in the recovery of three listed species,
    restoring more than 40,000 acres of habitat. New authority was provided
    in WRDA 2007 for the expenditure of funds in the upper basin States and
    for the Intake Dam project on the Yellowstone River in Montana.
    Construction of fish passage and screens at Intake Dam is a priority
    for the recovery of the endangered pallid sturgeon and other warm-water
    fish. The Conservancy supports $85 million for the MRRP in fiscal year
    2010, including sufficient funding to continue progress on the design
    and construction of fish passage and screens at Intake Dam.
        South Florida Everglades Ecosystem Restoration Program.--Corps
    flood control projects, coupled with agricultural and urban
    development, have degraded one of the most diverse and ecologically
    rich wetlands ecosystems in the world. WRDA 2007 authorized
    construction of the first projects under the Comprehensive Everglades
    Restoration Plan (CERP). We place priority on funding the restoration
    of the Kissimmee River, a project that is almost 75 percent complete
    and already a restoration success story. The Conservancy requests $300
    million for the South Florida Ecosystem Restoration Program in fiscal
    year 2010.
        Puget Sound and Adjacent Waters.--The Puget Sound and Adjacent
    Waters Program provides funding for early action projects to restore
    Puget Sound and its watershed. The Conservancy requests $3.5 million
    for Puget Sound and Adjacent Waters in fiscal year 2010. Identification
    of these early action projects is informed by the Puget Sound Nearshore
    Ecosystem Restoration project (in the Investigations account), for
    which the Conservancy requests $1.5 million in fiscal year 2010.
        Hamilton City Flood Damage Reduction and Ecosystem Restoration.--
    This project will increase flood protection for Hamilton City, CA and
    surrounding agricultural lands and restore approximately 1,500 acres of
    riparian habitat. The PED phase for this project will be complete in
    fiscal year 2009, the non-Federal sponsor is in place and the project
    received construction authorization in WRDA 2007. The Conservancy
    supports $15 million in fiscal year 2010 to complete the first phase of
    construction.
        Chesapeake Bay Oyster Recovery.--Eastern oyster populations in the
    Chesapeake Bay have been decimated from historical levels by a century
    of overfishing, disease and pollution. This project will help move the
    oyster population towards sustainable levels. The requested
    appropriation will create more than 60 acres of additional oyster
    habitat. The Conservancy supports $4 million in fiscal year 2010 for
    this program.

                           SUSTAINABLE RIVERS PROJECT

        The Sustainable Rivers Project (SRP) is an initiative launched by
    the Corps that recognizes the urgent need to update decades-old water
    management practices to meet society's needs today and in the coming
    decades. The SRP is developing and demonstrating innovative approaches
    to reservoir operations that restore critical ecosystems and valuable
    ecosystem services, while continuing to provide for (and often
    improving) water supply and flood risk management. These innovative
    approaches also offer substantial promise for social and ecological
    adaptation to climate change. The SRP currently involves work in 8
    river basins containing 36 Federal reservoirs, as well as training and
    development of next-generation decision support tools for water
    management. The Conservancy requests $3 million for the Corps'
    Institute for Water Resources to support engineering and scientific
    needs of current and new SRP sites.
        Savannah Basin Comprehensive Water Resources Study.--The Savannah
    River basin is experiencing tremendous growth, and recent droughts have
    highlighted the need to comprehensively address water use issues in the
    basin. The reconnaissance phase of this study evaluated water
    management in the reservoirs and indicated that future needs may not be
    met under current management practices. The feasibility phase will
    consider a new set of rules that could meet future demands while
    protecting more than 200 miles of river and tens of thousands of acres
    of wetlands. The Conservancy supports $250,000 in fiscal year 2010.
        Willamette River Floodplain Restoration Study.--The Corps and the
    Conservancy are working together to identify ecological flow
    requirements downstream of Corps dams, and to incorporate those flows
    into dam operations. Initial efforts have focused on the Middle and
    Coast Forks of the Willamette, in conjunction with a study to identify
    floodplain habitat restoration opportunities, and implementation and
    monitoring of flow releases are ongoing. Flow analysis has begun in
    additional tributaries, with the ultimate goal of system-wide changes
    in dam operation and floodplain management to meet ecological goals.
    The Conservancy supports $150,000 in fiscal year 2010 to continue this
    study.
        Connecticut River Watershed Study.--This project will restore 410
    miles of river flow and thousands of acres of natural habitat in the
    Connecticut River Basin. The basin is a priority landscape for the
    Conservancy due to its high quality tributary systems, unique natural
    communities and multitude of ESA-listed species. The study identifies
    dam management modifications for environmental benefits while
    maintaining beneficial human uses. We support $450,000 in fiscal year
    2010 for this study.
        Bill Williams River--Alamo Dam.--Numerous Federal, State and
    private partners have invested significant funding in determining the
    flow needs of downstream ecosystems and working with the Corps to
    change operations at Alamo Dam to provide these flows. This request
    will provide additional baseline information about the River and
    continue long-term monitoring to guide future management actions on
    rivers across the southwestern U.S. The Conservancy supports an
    Operations and Maintenance appropriation for Alamo Dam in fiscal year
    2010 that includes $250,000 for these purposes.

                      OTHER CORPS INVESTIGATION PRIORITIES

        Thames River Basin Watershed Study.--The Thames River Basin
    ecosystem, including its tributaries to Long Island Sound, depends on
    naturally variable water flow, good water quality and suitable habitat.
    This study will determine what research and measures are necessary to
    improve the management of water control structures in the basin. We
    support $100,000 in fiscal year 2010 to complete the reconnaissance
    phase.
        Middle Potomac River Watershed Comprehensive Study.--This study
    will develop a comprehensive, multi-jurisdictional sustainable
    watershed management plan for the Middle Potomac River watershed,
    balancing the ecological functions and services provided by the river
    with the human demands upon it. To support the completion of the
    watershed assessment, we support $844,000 in fiscal year 2010.
        Yellowstone River Corridor Comprehensive Study.--Funding this
    ongoing study of economics, fisheries, and wetlands studies will help
    ensure that the longest free-flowing river in the lower 48 States
    maintains its natural functions while supporting irrigation and other
    economic uses of its waters. The Conservancy supports $750,000 for
    fiscal year 2010.
        Lake Champlain Canal Feasibility Study.--Invasive species are the
    most significant threat to the native biodiversity of Lake Champlain in
    New York and Vermont. Several new invaders are poised to enter Lake
    Champlain through the Champlain Canal in coming years, and an invasive
    species dispersal barrier is urgently needed. The Corps is authorized
    to study the feasibility of such a barrier and to construct and operate
    it. The Conservancy supports $500,000 for the feasibility study in
    fiscal year 2010.
        Susquehanna River Basin Low Flow Management and Environmental
    Restoration.--Drought conditions, combined with current and projected
    demands for water use, have the potential to impact natural ecosystems
    in the Susquehanna River basin and the upper Chesapeake Bay. This
    appropriation will fund a basin-wide study to investigate low flow
    conditions and establish ecologically based goals and standards for low
    flow management. The Conservancy supports $285,000 in fiscal year 2010
    for this project.
        Navajo Reservation Watershed Management, Restoration and
    Development.--The San Juan River watershed is severely impacted by
    water withdrawals, flow regulation at Navajo Dam and runoff from
    petroleum extraction and agriculture. This project will formulate a
    conservation strategy for the watershed within the Navajo Nation. The
    Conservancy supports $315,000 in fiscal year 2010 for this project.
        Pecos River Environmental Management Planning.--The Pecos River
    below Santa Rosa Dam is severely affected by flow regulation,
    irrigation, water withdrawals and runoff, preventing native vegetation
    from regenerating and causing frequent drying. This project will help
    develop a comprehensive strategy that identifies key conservation
    targets, critical threats and practical actions to address them. The
    Conservancy supports $840,000 in fiscal year 2010 for this project.

                                 CORPS EXPENSES

        Mid-Atlantic River Basin Commissions.--We applaud the subcommittee
    for restoring Federal funding to the Delaware, Potomac, and Susquehanna
    River Basin Commissions in fiscal year 2009. They are essential to
    advancing and coordinating the water management and conservation
    interests of the Federal Government, the affected States, and the
    Conservancy. We support $2,365,000 for the Commissions in fiscal year
    2010.

                             BUREAU OF RECLAMATION

        Upper Colorado River Endangered Fish Recovery and San Juan River
    Basin Recovery Programs.--These programs take a balanced approach to
    restore four endangered fish species in the Colorado River system while
    allowing water use to continue in the arid West. A full appropriation
    will fund work on remaining major capital projects, including the
    completion of fish screens at the Hogback Diversion Dam and Tusher Wash
    Dam. The Conservancy supports $3.2 million in fiscal year 2010 for
    these Programs.
        Platte River Recovery Implementation Program.--An agreement between
    the Governors of Wyoming, Nebraska and Colorado and the Secretary of
    the Interior sets forth a plan to restore five endangered or threatened
    species in the Platte River basin. The Conservancy supports $14,038,500
    for this recovery effort in fiscal year 2010.
        Over the course of the past 10 years, restoration funding through
    the Corps has frequently focused on a select set of large-scale
    programs. These programs have been essential to restoring and
    maintaining some of America's most precious and imperiled ecosystems.
    At the same time, the role of smaller-scale projects should not be
    underestimated for their cumulative benefit and power as demonstrations
    to guide broader-scale efforts. We encourage the subcommittee to
    address the needs of these critical projects while continuing to
    support large-scale programs.
        All of the restoration projects supported in this testimony will
    create the same kinds of on-the-ground jobs created through the
    American Recovery and Reinvestment Act. The restored wetland and water
    resources resulting from these projects will also contribute ongoing
    value to local and regional economies through the important ecosystem
    services provided by healthy waterways and wetlands.
        Thank you for the opportunity to present our comments on the Energy
    and Water Appropriations bill.
                                     ______

      Prepared Statement of the American Society of Civil Engineers (ASCE)

        Mr. Chairman and members of the subcommittee, the American Society
    of Civil Engineers (ASCE) welcomes the opportunity to provide our views
    on the budget estimates for the U.S. Army Corps of Engineers (USACE or
    the Corps) and the U.S. Bureau of Reclamation (Bureau) for fiscal year
    2010.
        In its recent report on the concurrent resolution for fiscal year
    2010, the House Budget Committee said that the United States faces two
    significant deficits: the first, a budget in deficit this year alone by
    $1.752 trillion, according to the Office of Management and Budget
    (OMB); the second, an economy running at 6.8 percent, or $1 trillion,
    below its potential.
        These are daunting numbers, and Congress confronts a major
    challenge in funding the operations of the Government in light of the
    depressed economy and the continuing Federal deficits.
        But ASCE believes the Nation faces a third deficit--one that is as
    important as the first two. The United States must manage a continuing
    infrastructure investment deficit. Federal outlays for basic public
    works systems have declined relative to gross domestic product (GDP)
    over the past several decades.
        In its 2009 Report Card for America's Infrastructure, ASCE reported
    that the Nation needs to invest approximately $2.2 trillion over the
    next 5 years to maintain the Nation's total infrastructure in good
    condition.
        Even with current and planned investments from Federal, State, and
    local governments in the next 5 years, the ``gap'' between the overall
    need and actual spending will total more than $1 trillion by 2014.
        Within the Nation's general water resources alone, ASCE identified
    a 5-year funding gap of more than $20 billion.
        Nowhere is the infrastructure investment deficit more acute than in
    our waterways. Of the 257 locks still in use on the Nation's inland
    waterways, 30 were built in the 19th century and another 92 are more
    than 60 years old. The average age of all federally owned or operated
    locks is nearly 60 years, well past their planned design life of 50
    years. The cost to replace the present system of locks is estimated at
    more than $125 billion.
    congress should appropriate $7 billion for the u.s. corps of engineers

                    CIVIL WORKS PROGRAM IN FISCAL YEAR 2010

        The U.S. Army Corps of Engineers has one of the Federal
    Government's largest environmental responsibilities. The Corps provides
    ecosystem restoration, constructs sustainable facilities, regulates
    waterways and manages natural resources, and cleans up contaminated
    military bases.
        Forty-one States, 16 State capitals and all States east of the
    Mississippi River are served by commercially navigable waterways. The
    U.S. inland waterway system consists of 12,000 miles of navigable
    waterways in four systems that connect with most of the States in the
    United States. The entire system contains 257 locks. The waterways
    include the Mississippi River, the Ohio River Basin, the Gulf
    Intercoastal Waterway, and the Pacific Coast systems.
        Three-quarters of the Nation's inland waterways (9,000 miles) are
    within the Mississippi River system. The next largest segment is the
    Ohio River system (2,800 miles). The Gulf Coast Intercoastal Waterway
    system is 1,109 miles, and the Columbia River system is only 596 miles
    long, the shortest of the four major systems.
        The network includes nearly 11,000 miles of the ``fuel-taxed inland
    waterway system.'' Commercial waterway operators on these designated
    waterways pay a fuel tax, deposited in the Inland Waterways Trust Fund,
    which funds half the cost of new construction and major rehabilitation
    of the inland waterway infrastructure.
        Because of their ability to move large amounts of cargo, the inland
    waterways are a strategic economic and military resource. A recent
    analysis by the U.S. Army War College concluded that ``the strategic
    contributions of these inland waterways are not well understood. The
    lack of adequate understanding impacts decisions contributing to
    efficient management, adequate funding, and effective integration with
    other modes of transportation at the national level. Recommendations
    demonstrate that leveraging the strategic value of U.S. inland
    waterways will contribute to building an effective and reliable
    national transportation network for the 21st century.''
        The current system of inland waterways lacks resilience in that
    waterway usage is increasing but facilities are aging and many are well
    past their design life of 50 years. Recovery from any event of
    significance would be harmed by the age and deteriorated condition of
    the system. Future investment must focus on life-cycle maintenance,
    system interdependencies, redundancy, security, and recovery from
    natural and man-made hazards.
        In spite of inadequate budgets in recent years, the Corps continues
    to keep the waterways functioning. It will open new twin 1,200-foot
    locks on the Ohio River to replace a single, shorter lock built in
    1921. The Corps is currently constructing new, larger locks in several
    States, including Illinois, Kentucky, Louisiana, Pennsylvania, and West
    Virginia.
        The Corps also is embarking on major renovations of several older
    locks. These projects represent a $3.5 billion investment in
    modernizing the Nation's inland waterways. They also include
    significant investments in environmental restoration and management.
        The Corps is bringing new technology online to make waterways
    navigation safer. The latest innovation is called ``real-time current
    and velocities.'' This system alerts waterways users to the real-time
    speed of wind and currents on inland waterways. A total of six systems
    will be completed by the end of 2009.
        In addition to the infrastructure mentioned above, the Corps has
    major responsibilities in other areas. It protects coastlines; develops
    flood-reduction and hydropower projects; oversees 4,300 recreation
    areas at 420 lakes in 43 States; and operates 134 multiple-purpose
    projects that contain storage for water supply in 26 States and Puerto
    Rico.
        The USACE also shares responsibility among Federal, State and local
    agencies, and private landowners for raising awareness and
    understanding of the risks associated with living and working behind
    levees.
        The fiscal year 2009 appropriation for the Corps of Engineers is
    $5.4 billion, but the construction backlog for the Corps tops $60
    billion nationwide. Even with the addition of $4.6 billion for fiscal
    year 2009 through the American Recovery and Reinvestment Act, the
    investment deficit on our waterways remains at an estimated $20.5
    billion through 2014.
        The President's budget proposal for fiscal year 2010 is $5.1
    billion. Despite the difficult budget climate and the dismal economic
    picture, we urge an appropriation of $7 billion in fiscal year 2010 to
    begin the long overdue process of rebuilding America's water resources
    infrastructure.

        CONGRESS SHOULD APPROPRIATE $1.3 BILLION FOR THE U.S. BUREAU OF
                        RECLAMATION IN FISCAL YEAR 2010

        The Bureau of Reclamation's mission is to ``manage, develop, and
    protect water and related resources in an environmentally and
    economically sound manner in the interest of the American public.'' The
    Bureau is the Nation's largest wholesale water supplier; it administers
    348 reservoirs with a total storage capacity of 245 million acre-feet
    of water. It provides water to more than 31 million customers and
    supplies 20 percent of western farmers with water to irrigate 10
    million acres of farmland.
        In addition, the Bureau is the Nation's second largest producer of
    hydroelectric power, generating more than 40 billion kilowatt-hours of
    energy each year--an amount equivalent to the energy provided by 80
    million barrels of crude oil. In the 100 years since Reclamation's
    creation, the Federal Government has invested almost $21 billion in
    original development costs for its infrastructure and other facilities.
        The Bureau operates 348 dams and reservoirs, 58 hydropower
    generation facilities, more than 8,000 miles of canals, more than
    24,000 miles of water distribution laterals, and more than 13,000 miles
    of drains. ASCE notes that most of Reclamation's major dams,
    reservoirs, hydroelectric plants, and irrigation systems are 50 or more
    years old. In December 2007, the Bureau calculated that nearly 80 of
    the 348 dams (approximately 23 percent) are 90 to 100 years old or
    older.
        The Bureau has identified an estimated $3 billion in total
    infrastructure investment needs over the next 20 years.
        We concur with former Commissioner Robert Johnson, who informed
    Congress in 2008 that, although the Bureau and its more than 350
    operating partners have successfully operated and maintained the
    infrastructure to date, the aging process will inevitably lead to
    increased pressure on budgets and user rates to keep infrastructure
    service and reliability corresponding with past levels. The Bureau and
    its partners anticipate a steady increase in infrastructure repair
    needs that will continue to grow over time, the Bureau said last April.
        The fiscal year 2009 appropriation was $1.1 billion, the same as
    fiscal year 2008, for dams, canals, water treatment and conservation,
    and rural water projects. The fiscal year 2010 proposal is $1.020
    billion. Congress should appropriate $1.3 billion for the U.S. Bureau
    of Reclamation in fiscal year 2010, with the bulk of the increase set
    aside for infrastructure renewal under the Bureau's 5-year capital
    improvement plan.
                                     ______

     Prepared Statement of the Board of Levee Commissioners for the Yazoo-
                               Mississippi Delta

     U.S. ARMY CORPS OF ENGINEERS MISSISSIPPI RIVER & TRIBUTARIES PROJECT
                     FISCAL YEAR 2010 REQUEST--$500 MILLION

        As the front line flood protection provider for the approximately
    300,000 Mississippians who reside within the 10 counties of our levee
    district, the Yazoo-Mississippi Delta Levee Board humbly requests that
    you allocate adequate funding to fully fund the Mississippi River and
    Tributaries Project (MR&T) at the Corps of Engineers' capability level
    for the 2010 fiscal year--$500 million.
        And yes, we do know that is a lot of money. Even in this time--one
    which many of us believed we'd never see--of trillion dollar deficits
    and untold trillions in evaporated wealth, we do indeed know that $500
    million is a lot of money.
        We know that these are perilous times for our Nation, times in
    which the collective wisdom and sound judgment of you men and women
    will be nothing less than critical to our well being as a people. We
    know there are simply fiscal limits and we know that priorities must be
    and will be set.
        But we also know that flood control is nothing less than vital to
    America's heartland. In many cases, such as our part of the Mississippi
    Delta, flood control is the primary factor allowing those who live
    there to live there. The heartland produces much of the food and fiber
    which allows us to feed and clothe not only our Nation, but much of the
    world. But there can be no food, there can be no fiber if the most
    fertile soils this side of the Nile delta were to be under water--were
    to be again inundated by the same water which created them.
        The Mainline Mississippi River Levee System, truly one of the
    world's greatest engineering marvels, is literally all that stands
    between the human beings who live and produce and prosper up and down,
    along either side of the Mississippi River--the largest, most powerful
    and often most fickle flowing waterway on the North American continent.
    Our levees are strong, true and tested, but like all the creations of
    man, they must be maintained; they must be vigilantly strengthened and
    repaired from the ravages of the power they contain every day.
        We ask that the MR&T's levees be funded at levels of $69.972
    million for construction, $61.2 million for channel improvements,
    $13.522 million for levee maintenance and $79.309 million for channel
    maintenance.
        There are many projects, many efforts within the flood control
    umbrella that is the MR&T, and there are many who will speak to you on
    behalf of them, but for our people, for the lives and livelihoods of
    those we are dedicated to protect, there is only this levee board to
    speak. And so we now will.
        For us there must remain one overriding priority--the Upper Yazoo
    Project. Ladies and Gentlemen, this effort designed to protect
    thousands from chronic flooding along the Yazoo/Coldwater river system,
    is perhaps the least controversial flood control project in the Nation,
    favored not only by our citizenry but the environmental community, as
    well. It is designed and it is demonstratively effective within its
    completed reaches. It need only be adequately funded to provide long
    awaited relief to those who have suffered for many years.
        We ask that you provide the Corps capability funding level of $24.4
    million in 2010.
        We also ask that this collective Congress provide funding for the
    following projects affecting our district and its people at the 2010
    capability levels:

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
                        CONSTRUCTION
    Backwater...........................................            $325,000
    Main Stem...........................................             $25,000
    MS Delta Headwaters.................................         $25 million
    Big Sunflower River.................................       $2.18 million
    Reformulation Study.................................          $3 million

                         MAINTENANCE

    Revetments and Dikes................................       $58.2 million
    Sardis Lake.........................................     $14.483 million
    Arkabutla Lake......................................     $13.793 million
    Enid Lake...........................................      $12.69 million
    Grenada Lake........................................     $13.231 million
    Greenwood...........................................       $1.85 million
    Yazoo City..........................................            $550,000
    Yazoo Main Stem.....................................      $3.154 million
    Yazoo Tributaries...................................            $953,000
    Big Sunflower.......................................      $4.311 million
    Yazoo Backwater.....................................            $905,000
    ------------------------------------------------------------------------

        Thank you for your careful consideration of our requests and we
    trust that once again, as has been so critical for our people on so
    many occasions over the years, the old adage will once again be
    validated: ``The President proposes, but the Congress disposes.''
                                     ______

         Prepared Statement of the California State Coastal Conservancy

                                    SUMMARY

        On behalf of the California State Coastal Conservancy, I want to
    thank the subcommittee for this opportunity to present our priorities
    for fiscal year 2010 and, at the same time, express our appreciation
    for your support of the Conservancy's projects in past years. The
    Conservancy respectfully requests needed funding for the following
    critical U.S. Army Corps of Engineers projects during fiscal year 2010.
    All of these requests reflect Corps of Engineers capability for the
    individual projects: $18 million for the Matilija Dam Ecosystem Project
    (Construction General); $7,750,000 for Napa River Salt Marsh Project
    (Construction General); $18,500,000 for the Hamilton Bel-Marin Keys
    Wetland Restoration Project (Construction General) and $2,800,000 for
    the South San Francisco Bay Shoreline Study (General Investigations).

                             CONSERVANCY BACKGROUND

        The California Coastal Conservancy, established in 1976, is a State
    agency that uses entrepreneurial techniques to purchase, protect,
    restore and enhance coastal resources while providing public access to
    the shore. We work in partnership with local governments, other public
    agencies, nonprofit organizations, and private landowners to accomplish
    these goals.
        To date, the Conservancy has undertaken more than 950 projects
    along the 1,100 mile California coastline and around San Francisco Bay,
    resulting in completed projects in every coastal county and all 9 San
    Francisco Bay Area counties. Through these projects, the Conservancy:
    protects and improves coastal wetlands, streams, and watersheds; works
    with local communities to revitalize urban waterfronts; assists local
    communities in solving complex land-use problems; and protects
    agricultural lands and supports coastal agriculture, to list a few of
    its main activities.
        Since our establishment in 1976, the Coastal Conservancy has:
    helped build more than 300 access ways and trails opening more than 80
    miles of coastal and bay lands for public use; assisted in the
    completion of over 100 urban waterfront projects; and joined in
    partnership endeavors with more than 100 local land trusts and other
    nonprofit groups, making local community involvement an integral part
    of the Coastal Conservancy's work.

      MATILIJA DAM ECOSYSTEM RESTORATION PROJECT--CORPS OF ENGINEERS, LOS
                                ANGELES DISTRICT

        In fiscal year 2010 we are seeking $18,500,000 in Construction
    funding for the Army Corps of Engineers Construction General account to
    finalize design and begin the removal of the Matilija Dam in Ventura
    County, California. Approximately $1 million will be utilized to
    finalize design activities and the remaining $14 million in Corps
    capability will be used to advance construction of the project. Of that
    amount, approximately $7,500,000 would be designated for construction
    activities associated with the high-flow bypass of the dam with the
    remaining $5,500,000 being utilized for the building of levees
    downstream from the site.
        The Matilija Dam Ecosystem Restoration Project, authorized in
    Public Law 110-114, is a project of vital importance and consists of
    the removal of the no longer needed or functional 200-foot tall
    Matilija Dam, located on a tributary to the Ventura River. The dam is
    currently unusable as sediment has filled in its reservoir. Completion
    of the project will reopen 17.3 miles of unimpeded habitat for the
    endangered steelhead trout and other aquatic species. In addition, the
    project will restore over 2,800 acres of habitat that will support a
    wide variety of native species, including 25 special status species
    while replenishing area beaches by allowing sand (now trapped behind
    the Dam) to flow to coastal beaches upon the Dam's removal.
        The removal of Matilija Dam will also provide extensive economic
    benefits in addition to the environmental benefits that will be
    accrued. Specifically, over the life of the project we can expect an
    increase in California's economic output of $250 million and the
    creation of 1,500 jobs for the $100 million investment in the
    construction of the project. In the more immediate future (3 years)
    there would be an economic benefit of $150 million and the creation of
    over 900 jobs making the project a sound investment in California and
    the Nation's economy.
        This project is one of the largest dam removal projects in the
    Country and enjoys broad support from many local, State and Federal
    agencies. To remove the dam, 6 million cubic yards of sediments will be
    moved or recontoured and a high flow sediment bypass system will be
    constructed at a water diversion downstream. In addition, a silt
    removal system will be installed along the diversion canal.
    Furthermore, levees will be built in several places along the river
    channel to protect property from flooding due to the expected increases
    in stream channel elevation in the first years after removal of the
    dam. The project also involves removal of invasive plants and the
    installation of replacement water wells.

       NAPA RIVER SALT MARSH--CORPS OF ENGINEERS, SAN FRANCISCO DISTRICT

        For fiscal year 2010, we are seeking $8 million in construction
    funds to continue to advance this critical project that is nearly two-
    thirds complete. The only remaining work is that which was authorized
    for construction in Public Law 110-114 and must be undertaken by the
    U.S. Army Corps of Engineers. The funds requested would allow the Corps
    of Engineers to complete design and begin construction of their portion
    of the Napa River Salt Marsh Project which includes the restoration of
    Ponds 6-8. It is important to note that the project can be completed
    quickly as it only requires a total of $13 million to construct the
    Ponds 6-8 improvements over an estimated 2-year construction period.
        Substantial funding during the current fiscal year is essential to
    ongoing project success as the local sponsors have spent their full
    share and have no additional State or local funds dedicated to the
    project to continue its implementation. State and local partners
    expended their share on completion of Phases I and II of the project.
    Phase I involved opening 3,000 acres of salt ponds (Ponds 3, 4, and 5)
    to full tidal action in 2006 and is the largest tidal restoration
    project in the San Francisco Bay to date. Phase II involved the
    restoration of 1,700 acres (Ponds 1/1A, and 2) to managed ponds for
    waterfowl and shorebirds in 2007. Without Federal funding this fiscal
    year, the project will continue to be halted, benefits will continue to
    be delayed and project costs will increase greatly.
        The project is part of a larger environmental restoration effort to
    restore the Nation's second largest estuary the San Francisco Bay, and
    its watershed, to its natural state. This restoration effort is
    expected to improve the environmental sustainability of the Estuary
    while providing great scenic and recreational values for the local
    community. Federal funds are critically required for the completion of
    the project whose extensive benefits to the region include: providing
    extensive wetland habitat in San Francisco Bay; the beneficial use for
    recycled water in the North Bay; improved open space and recreational
    opportunities; and resolving urgent issues associated with
    deterioration of the site's levee, water control structures, and water
    quality.
        Our request reflects Corps capability and funding will be utilized
    to complete design of Ponds 6-8. In addition, funding will initiate
    design of the recycled water pipeline, an item expressly included by
    Congress in the project's authorization. Funds will also be used to
    secure necessary permits and approvals and begin construction of Ponds
    6-8.
        The 10,000 acre Napa River Salt Marsh was purchased by the State of
    California from Cargill in 1994 and is managed by the California
    Department of Fish and Game. The State Coastal Conservancy has been the
    non-Federal sponsor working with the Corps on the Feasibility Study.
    The Corps' Feasibility Study was completed and the Chief's Report was
    signed in December 2004.

         HAMILTON BEL-MARIN KEYS WETLAND RESTORATION PROJECT--CORPS OF
                       ENGINEERS, SAN FRANCISCO DISTRICT

        In fiscal year 2010, the California State Coastal Conservancy is
    seeking $18,500,000 in Construction funding for the Hamilton Bel-Marin
    Keys Wetland Restoration Project. The project was authorized by
    Congress in 1999 (Public Law 106-53) and our request reflects Corps
    capability for the project.
        This project is of critical importance as it will provide nearly
    700 acres of restored tidal and seasonal wetlands at a former Army base
    and provides much needed habitat for several threatened and endangered
    species; as well as, shorebirds and waterfowl migrating along the
    Pacific Flyway. Because the project requires large volumes of dredged
    sediment for completion, this project will result in a greatly reduced
    need to dispose of sediment in the Bay and Pacific Ocean, which has
    direct benefits to aquatic life. Furthermore, the project also
    beneficially uses dredged material from the San Francisco Bay which
    provides for increased navigation and maritime commerce, a much needed
    economic stimulus for the region. In addition to the extensive
    environmental and maritime navigation benefits, the project will also
    serve as a key driver for the regional economy as implementation and
    full funding is expected to bring approximately 304 jobs to Marin
    County, California.
        The project was provided full funding in the Omnibus Appropriations
    Act of 2009 and as a result work is currently underway. As a result of
    this significant commitment, the majority of the required site
    preparation has been completed on the former Army Airfield, including
    the construction of miles of levees. The main runway and taxiways are
    now in the process of being buried under millions of cubic yards of
    clean dredged sediment. Subsequently, the easterly levee will be
    breached allowing tidal waters to once again flood the site.
    Significant progress has been made as over 2.4 million cubic yards
    being delivered to Hamilton as of January 2009. To complete the
    Airfield portion of the project an additional 5 million cubic yards of
    sediment is needed. Under the current schedule it is expected that
    completion of the Airfield portion of the project will occur between
    2013 and 2015. Following completion of the Airfield, the Corps will
    work on the adjacent Antenna field and Bel-Marin Keys V property for a
    total project area of nearly 2,500 acres.
        The project enjoys broad support from environmental groups, labor
    and maritime interests as well as local government in Marin County. Key
    supporters include the San Francisco Bay Joint Venture, the County of
    Marin, the Port of Oakland, the Bay Planning Coalition, the Bay
    Institute, the Save San Francisco Bay Association, the National Audubon
    Society, and many others.

       SOUTH SAN FRANCISCO BAY SHORELINE STUDY--CORPS OF ENGINEERS, SAN
                               FRANCISCO DISTRICT

        The Conservancy is seeking $2,800,000 in Investigations funding to
    continue the Feasibility Study for this groundbreaking project that
    will provide tidal and fluvial flood protection to the south San
    Francisco Bay Area. The study was initiated in fiscal year 2005 and has
    been ongoing thanks to the support of the subcommittee. In fact, in the
    Omnibus Appropriations Act of 2009 the project received $2,800,000
    representing full capability for the project.
        This project is of national significance as it will provide tidal
    and fluvial flood protection for the south San Francisco Bay Area,
    including Silicon Valley, protecting approximately 42,800 acres, 7,400
    homes and businesses, and significant urban infrastructure, including
    major highways, hospitals and airport facilities. In addition, the
    project is being pursued in conjunction with the 2nd largest wetlands
    restoration project occurring in the United States and as such will
    provide extensive habitat for federally endangered species and
    migratory waterfowl.
        To continue to advance this important study it is imperative that
    local interests and the Federal Government work together to ensure a
    reliable funding stream for the project. To that end, continued Federal
    funds are necessary to keep the project on schedule as the
    Conservancy's co-local sponsor for the project, the Santa Clara Valley
    Water District, will be approaching voters in 2012 to secure local
    funding for the construction of the recommended project. When this
    occurs, the District needs to have a deliverable product that they can
    showcase to voters given the fact that California's Proposition 13
    requires that any new taxation be approved by a two-thirds majority of
    voters.
        During fiscal year 2010 we are seeking $2,800,000 in accordance
    with Corps of Engineers capabilities for the project during the current
    fiscal year. Funds in fiscal year 2010 are expected to be used for the
    following activities: Hydrology, Hydraulics and Coastal Analysis--$1
    million; Economics Analysis--$250,000; Plan Formulation--Alternatives
    Development $250,000; Habitat Evaluation Analysis--$150,000; NEPA--EIS
    Development--$400,000; Engineering & Design/Geotech--$200,000; Project
    Management--$400,000 and Surveys & Mapping--$150,000.
        The project enjoys substantial support among Federal, State and
    local agencies with the following agencies serving as active project
    partners: California State Coastal Conservancy; California Department
    of Fish and Game; U.S. Fish and Wildlife Service; U.S. Army Corps of
    Engineers, NOAA, U.S. Geological Survey; Santa Clara Valley Water
    District; Alameda County Flood Control and Water Conservation District;
    Hewlett, Packard, and Moore Foundations and the Goldman Fund. The
    project is also supported by the San Francisco Bay Joint Venture, the
    city of San Jose, The Bay Institute, Save the Bay, the Bay Trail
    Program, the National Audubon Society, and many other local
    governments, environmental groups, community groups, businesses, and
    recreation organizations.
                                     ______

          Prepared Statement of the Santa Clara Valley Water District

                                    SUMMARY

        This statement urges the subcommittee's support for a fiscal year
    2010 appropriation of $100,000 to initiate a Reconnaissance Study of
    the Coyote Creek Watershed.

               STATEMENT OF SUPPORT--COYOTE CREEK WATERSHED STUDY

        Background.--Coyote Creek drains Santa Clara County's largest
    watershed, an area of more than 320 square miles encompassing most of
    the eastern foothills, the city of Milpitas, and portions of the Cities
    of San Jose and Morgan Hill. It flows northward from Anderson Reservoir
    through more than 40 miles of rural and heavily urbanized areas and
    empties into south San Francisco Bay.
        Prior to construction of Coyote and Anderson Reservoirs, flooding
    occurred in 1903, 1906, 1909, 1911, 1917, 1922, 1923, 1926, 1927, 1930
    and 1931. Since 1950, the operation of the reservoirs has reduced the
    magnitude of flooding, although flooding is still a threat and did
    cause damages in 1982, 1983, 1986, 1995, and 1997. Significant areas of
    older homes in downtown San Jose and some major transportation
    corridors remain susceptible to extensive flooding. The federally-
    supported lower Coyote Creek Project (San Francisco Bay to Montague
    Expressway), which was completed in 1996, protected homes and
    businesses from storms which generated record runoff in the northern
    parts of San Jose and Milpitas.
        The proposed Reconnaissance Study would evaluate the reaches
    upstream of the completed Federal flood protection works on lower
    Coyote Creek.
        Objective of Study.--The objectives of the Reconnaissance Study are
    to investigate flood damages within the Coyote Creek Watershed; to
    identify potential alternatives for alleviating those damages which
    also minimize impacts on fishery and wildlife resources, provide
    opportunities for ecosystem restoration, provide for recreational
    opportunities; and to determine whether there is a Federal interest to
    proceed into the Feasibility Study Phase.
        Study Authorization.--In May 2002, the House of Representatives
    Committee on Transportation and Infrastructure passed a resolution
    directing the Corps to ``. . . review the report of the Chief of
    Engineers on Coyote and Berryessa Creeks . . . and other pertinent
    reports, to determine whether modifications of the recommendations
    contained therein are advisable in the interest of flood damage
    reduction, environmental restoration and protection, water conservation
    and supply, recreation, and other allied purposes . . .''.
        Fiscal Year 2006 Administration Budget Request and Funding.--The
    Coyote Watershed Study was one of only three ``new start'' studies
    proposed for funding nationwide in the administration fiscal year 2006
    budget request. Congress did not include funding for the study in the
    final fiscal year 2006 appropriations bill, or in any subsequent bills.
        Fiscal Year 2009 Funding.--Congress did not appropriate any funding
    to the project in fiscal year 2009.
        Fiscal Year 2010 Funding Recommendation.--It is requested that the
    Congressional Committee support an appropriation of $100,000 to
    initiate a multi-purpose Reconnaissance Study within the Coyote Creek
    Watershed.

                                    SUMMARY

        This statement urges the subcommittee's support for a fiscal year
    2010 appropriation of $2.25 million to complete the General
    Reevaluation Report, update of environmental documents, and commence
    design work for the Berryessa Creek Flood Protection Project element of
    the Coyote/Berryessa Creek Project.

     STATEMENT OF SUPPORT--COYOTE/BERRYESSA CREEK PROJECT--BERRYESSA CREEK
                                PROJECT ELEMENT

        Background.--The Berryessa Creek Watershed is located in northeast
    Santa Clara County, California, near the southern end of the San
    Francisco Bay. A major tributary of Coyote Creek, Berryessa Creek
    drains 22 square miles in the city of Milpitas and a portion of San
    Jose.
        On average, Berryessa Creek floods once every 4 years. The most
    recent flood in 1998 resulted in significant damage to homes and
    automobiles. The proposed project on Berryessa Creek, from Calaveras
    Boulevard to upstream of Old Piedmont Road, will protect portions of
    the cities of San Jose and Milpitas. The flood plain is largely
    urbanized with a mix of residential and commercial development. Based
    on the U.S. Army Corps of Engineers (Corps) 2005 report, a 1 percent or
    100-year flood could potentially result in damages exceeding $179
    million. Benefit-to-cost ratios for the six project alternatives being
    evaluated range from 2:1 to 7.3:1.
        Study Synopsis.--In January 1981, the Santa Clara Valley Water
    District (District) applied for Federal assistance for flood protection
    projects under section 205 of the 1948 Flood Control Act. The Water
    Resources Development Act of 1990 authorized construction on the
    Berryessa Creek Flood Protection Project as part of a combined Coyote/
    Berryessa Creek Project to protect portions of the cities of Milpitas
    and San Jose.
        The Coyote Creek element of the project was completed in 1996. The
    Berryessa Creek Project element proposed in the Corps' 1987 feasibility
    report consisted primarily of a trapezoidal concrete lining. This was
    not acceptable to the local community. The Corps and the District are
    currently preparing a General Reevaluation Report which involves
    reformulating a project which is more acceptable to the local community
    and more environmentally sensitive. Project features will include
    setback levees and floodwalls to preserve sensitive areas (minimizing
    the use of concrete), appropriate aquatic and riparian habitat
    restoration and fish passage, and sediment control structures to limit
    turbidity and protect water quality. The project will also accommodate
    the city of Milpitas' adopted trail master plan. Estimated total costs
    of the General Reevaluation Report work are $6.5 million, and should be
    completed in 2009.
        Fiscal Year 2009 Funding.--Congress appropriated $138,000 to the
    project in fiscal year 2009.
        Fiscal Year 2010 Funding Recommendation.--Based on the continuing
    threat of significant flood damage from Berryessa Creek and the need to
    complete the General Reevaluation Report, it is requested that the
    Congressional Committee support an appropriation of $2.25 million for
    the Berryessa Creek Flood Protection Project element of the Coyote/
    Berryessa Creek Project.
                                     ______

           Prepared Statement of the Calaveras County Water District

                                PROJECT REQUESTS
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    NEW HOGAN WATER DISTRIBUTION SYSTEM (Construction General--     $600,000
     section 219)..............................................
    COSGROVE CREEK FLOOD CONTROL PROJECT (Construction General--     200,000
     section 205)..............................................
    CALAVERAS COUNTY REGIONAL WATER/WASTEWATER AND RECYCLED          600,000
     WATER FACILITIES PROGRAM--PHASE II (Construction General--
     section 5039).............................................
    ------------------------------------------------------------------------

                                    OVERVIEW

        On behalf of the Calaveras County Water District, I want to thank
    the subcommittee for this opportunity to present our priorities for
    fiscal year 2010 and, at the same time, express our appreciation for
    your support of the District's projects in recent years. The Calaveras
    County Water District is respectfully seeking the following requests
    before the Senate Energy and Water Development Appropriations
    Subcommittee from the U.S. Army Corps of Engineers during fiscal year
    2010. We are seeking $600,000 from the Corps of Engineers Construction
    General Account section 219 for our New Hogan Water Distribution System
    request; $200,000 from the Corps of Engineers Construction General
    Account section 205 for the Cosgrove Creek Flood Control Project; and
    $600,000 from the Corps Construction General Account section 5039 for
    the Calaveras County Regional Water/Wastewater and Recycled Water
    Facilities Program Phase II.
        As background, our agency, the Calaveras County Water District
    (CCWD) was founded in the fall of 1946 and was organized under the laws
    of the State of California as a public agency for the purpose of
    developing and administering the water resources in Calaveras County.
    Therefore, CCWD is a California Special District and is governed by the
    California Constitution and the California Government and Water Codes.
    CCWD is not a part of, or under the control of, the County of
    Calaveras. CCWD was formed to preserve and develop water resources and
    to provide water and wastewater service to the citizens of Calaveras
    County.
        Under State law, CCWD, through its board of directors, has general
    powers over the use of water within its boundaries. These powers
    include, but are not limited to: the right of eminent domain, authority
    to acquire, control, distribute, store, spread, sink, treat, purify,
    reclaim, process and salvage any water for beneficial use, to provide
    sewer service, to sell treated or untreated water, to acquire or
    construct hydroelectric facilities and sell the power and energy
    produced to public agencies or public utilities engaged in the
    distribution of power, to contract with the United States, other
    political subdivisions, public utilities, or other persons, and subject
    to the California State Constitution, levy taxes and improvements.

                      NEW HOGAN WATER DISTRIBUTION PROJECT

        CCWD is seeking $600,000 in fiscal year 2010 for the New Hogan
    Water Distribution Project, a multi-phased project that will improve
    the region's water supply, significantly increase and protect water
    quality and provide significant environmental restoration that will
    greatly increase habitat for local wildlife while increasing
    recreational opportunities for the local community. The project will
    construct infrastructure to convey surface water to existing and
    expanding agricultural acreage in western Calaveras County. The area
    currently relies on a diminishing groundwater supply, which is
    experiencing water quality problems and has been identified by the
    State as an overdrafted groundwater basin. The project will include
    monitoring facilities to continually evaluate the region's sensitive
    groundwater basin and its response to conjunctive use operation and
    will also include enhanced modeling tools that evaluate the
    effectiveness of planned or proposed facilities for expanding
    conjunctive use in the region.
        The project will provide a sustainable water supply for the western
    Calaveras County region experiencing declining groundwater levels,
    water quality deterioration, expanding agriculture, significant
    population growth, and the continuing threat of drought. Infrastructure
    will be built to convey surface water from existing reservoirs and
    water rights and entitlements permitted or contracted by the Calaveras
    County Water District to areas at greatest risk for groundwater supply
    problems. Through introduction of surface water planned decades ago,
    the Calaveras County Water District will introduce conjunctive use to
    increase water supply reliability for all surface water and groundwater
    users within the western Calaveras County region. The project will
    benefit all of California as it will minimize the losses of naturally
    occurring springs and will improve stream-flow conditions for river
    tributaries of the Sacramento-San Joaquin River Delta, which provides
    two-thirds of the State of California with water. Finally, water
    conservation and wastewater recycling are critical elements that can
    reduce demands or stretch existing water supplies. Assessment of public
    outreach and environmental documentation needs will also be performed,
    as identified in a project management plan.
        Cost Breakdowns for this project in fiscal year 2010 are listed as
    follows: Negotiation Project Partnership Agreement (PPA) and initial
    planning, design, and construction contract $50,000; develop Calaveras-
    Mokelumne Master Plan Concept $50,000; water supply and demand analysis
    $75,000; alternatives formulation and analysis $175,000; environmental
    program development $75,000; development of institutional partnerships
    and public outreach, $100,000; development of Feasibility Report
    $75,000.

                      COSGROVE CREEK FLOOD CONTROL PROJECT

        CCWD, in conjunction with Calaveras County, is seeking $200,000 in
    the Construction General section 205 account for the Cosgrove Creek
    Flood Control Project. The project will address flooding that occurs
    along the lower reaches of the creek, as well as flooding that occurs
    on Spring Creek. Flooding in these areas impacts over 400 people and
    100 structures located in the 100-year floodplain. The project will
    attenuate peak flows, address the beneficial use of peak flows,
    stabilize creek banks, improve natural conditions favorable to wetlands
    and riparian habitat, and increase recreational opportunities in the
    area. In addition to providing critical flood control for the region,
    the project will provide a number of ancillary benefits including; the
    beneficial use of flood flows including sprayfields, conjunctive use of
    recycled water and wetlands restoration. Further, the project will
    provide additional riparian habitat and much-needed recreational
    opportunities through the creation of hiking/riding trails and numerous
    athletic fields for use by the local community.

         CALAVERAS COUNTY REGIONAL WATER/WASTEWATER AND RECYCLED WATER
                          FACILITIES PROGRAM--PHASE II

        CCWD third and final priority for fiscal year 2010 is a request for
    $600,000 to support the Calaveras County Regional Water/Wastewater and
    Recycled Water Facilities Program Phase II, a multi-phase,
    collaborative project to investigate strategic opportunities to correct
    water and wastewater utility deficiencies along the Highway 4 corridor
    in the Stanislaus River Watershed of Calaveras County.
        Utility regionalization and improved coordination are needed to
    support sustainable practices in the Sierra Nevada foothill
    communities. This project would create partnerships between local,
    State, and Federal agencies so that infrastructure improvements,
    replacement needs, and growth decisions can be coordinated in a manner
    that respects connections between water, wastewater, land use, and
    development within the watershed thereby greatly enhancing the
    utilization and safeguarding of our region's water resources.
        To accomplish these objectives CCWD will partner with Calaveras
    County, the city of Angels, Murphys Sanitary District, Union Public
    Utility District, and the Utica Power Authority. Through the
    identification of particular problem areas and collaboration with our
    local partners a ``living'' model will be developed to examine
    strategies for regionalizing water and wastewater facilities. A
    technical team consisting of project partners will develop preliminary
    concept plans based on shared goals, objectives, and priorities.
    Information will be circulated among all stakeholders and strong
    community involvement plan will be put forth that will incorporate the
    suggestions of the public and interested non-governmental
    organizations. This original model will then be further refined to
    evaluate concepts achieving maximum beneficial use to ensure a
    sustainable, cost-effective concept plan emerges for regional watershed
    implementation.
        Cost breakdowns for this critical project in fiscal year 2010 are
    listed as follows: Negotiation of PPA and Initial planning, design, and
    construction contract $50,000; development of regional water/wastewater
    and recycled water master plan concept $50,000; summary of existing
    facilities and regulatory setting $50,000; evaluation of wastewater and
    water supply needs $75,000; formulation and evaluation of alternatives
    $200,000; development of institutional partnerships and public outreach
    $100,000; and reparation of Feasibility Study $75,000.
                                     ______

            Prepared Statement of the Izaak Walton League of America

        The Izaak Walton League of America appreciates the opportunity to
    submit testimony concerning appropriations for fiscal year 2010 for
    programs under the jurisdiction of the subcommittee. The League is a
    national, nonprofit organization founded in 1922. We have nearly 37,000
    members and 270 community-based chapters nationwide. Our members are
    committed to advancing common sense policies that safeguard wildlife
    and habitat, support community-based conservation, and address pressing
    environmental issues. The following pertains to programs administered
    by the U.S. Army Corps of Engineers.
    corps of engineers, operations and maintenance, upper mississippi river
        The League supports strong financial efforts for ecosystem
    restoration for the Upper Mississippi River (UMR). We have supported
    the Environmental Management Program (EMP) since its inception and
    continue to support this vital restoration program. EMP should be fully
    funded at its authorized level of $33.2 million and the current
    restriction for starting new EMP projects should be lifted. It is
    important to note that even this level of investment can serve only to
    slow the pace of UMR degradation, not achieve net restoration.
        The League has also strongly expressed its opinion that the large-
    scale navigation modifications included in the Recommended Plan for the
    Upper Mississippi Navigation and Ecosystem Sustainability Program
    (NESP), as authorized by the Water Resources Development Act of 2007,
    have not been justified by the Corps and should not be pursued.
    Previous reviews from the National Academy of Sciences and the
    Assistant Secretary of the Army, Civil Works found that the navigation
    construction component of NESP was not economically justifiable.
        The League has strong roots in the Upper Mississippi River region.
    Protecting the basin has been a key issue for our members since we led
    the fight to create the Upper Mississippi River Fish and Wildlife
    Refuge in 1924. The League has spearheaded efforts to reform the lock
    and dam navigation system to ensure that flows and habitat remain as
    natural as possible. We also work to promote sustainable agriculture
    practices and implement farm conservation programs to reduce polluted
    runoff. Our testimony reflects many decades of experience on the Upper
    Mississippi River and our direct 15-year involvement with the Upper
    Mississippi River--Illinois Waterway (UMR-IWW) navigation study.
        The Upper Mississippi River is one of the most complex ecosystems
    on earth. It provides habitat for 50 species of mammals, 45 species of
    reptiles and amphibians, 37 species of mussels, and 241 species of
    fish. The need for ecosystem restoration is unquestionable. As the
    Corps correctly stated in its study of navigation expansion, this
    ecosystem is ``significantly altered, is currently degraded, and is
    expected to get worse.'' Researchers from the National Academy of
    Sciences have determined that river habitat is disappearing faster than
    it can be replaced through existing programs such as the Corps'
    Environmental Management Program, which was authorized at $33.2 million
    annually by Congress in 1999, but has never received full
    appropriations. As habitat vanishes, scientists warn that many species
    will decline and some will disappear.
        Our Nation relies on a healthy Mississippi River for commerce,
    recreation, drinking water, food supply and power. More than 12 million
    people annually recreate on and along the Upper Mississippi River
    spending $1.2 billion and supporting 18,000 jobs. More people recreate
    on the Upper Mississippi than visit Yellowstone National Park. Notably,
    barge traffic has remained static on the river for more than two
    decades with real declines in recent years.
        The Water Resources Development Act of 2007 authorizes the
    Navigation and Ecosystem Sustainability Program (NESP) for the Upper
    Mississippi River. NESP allocates $2.2 billion for new navigation-
    related construction and $1.7 billion for ecosystem restoration over an
    initial 15-year project phase. Included in the $2.2 billion is over
    $256 million for small-scale and non-structural navigation projects
    that we fully support. However, we have consistently opposed the
    unnecessary spending of tax dollars on the economically unsound new
    locks, a position further bolstered by the continuing annual declines
    in barge traffic on the UMR.
        In assembling the UMR-IWW navigation study, the Corps recognized
    the critical need for UMR ecosystem restoration work and encouraged
    Congress to invest approximately $130 million annually in Upper
    Mississippi River habitat restoration efforts. With this demonstrated
    need in mind, the League strongly encourages the subcommittee to
    prioritize investment in ecosystem restoration. Appropriating
    significant funding for restoration will provide near-term economic
    stimulus in communities along the UMR and long-term conservation and
    economic benefits for the region and the Nation.
        The administration's budget does not request funding for NESP. The
    League supports increasing fiscal year 2010 NESP navigation funding to
    adequately cover the cost of initiating small-scale and non-structural
    navigation projects only. We strongly support increasing total
    ecosystem restoration funding incrementally, in an efficient and
    effective manner, to reach the total $130 million investment as soon as
    feasible.

         CORPS OF ENGINEERS, OPERATIONS AND MAINTENANCE, MISSOURI RIVER

        For fiscal year 2010, we urge the subcommittee to provide at least
    $70 million as the President has specifically requested for ecosystem
    restoration along the Missouri River. We believe it is essential to
    provide this minimum amount because the final fiscal year 2009
    appropriation is significantly below the request and the Corps
    identified approximately $26 million in restoration projects that could
    commence quickly to stimulate local economies, but these were not fully
    funded by the American Recovery and Reinvestment Act. In addition,
    through the Missouri River Recovery Program, the Army Corps has
    identified $105 million in projects, which have been designed and
    approved, that it could implement next fiscal year. With at least $70
    million, the Corps and U.S. Fish and Wildlife Service could begin
    important ecosystem restoration efforts that will produce long-term
    ecological and economic benefits, as well as provide economic stimulus
    throughout fiscal year 2010 by allowing the agencies to move forward
    with shovel-ready projects.
        The Missouri River basin encompasses land in 10 States and covers
    one-sixth of the continental United States. The Missouri, America's
    longest river, is one of the most altered ecosystems on earth. While
    recovery and restoration efforts have begun, much more needs to be
    done. League members, especially those in Iowa, Nebraska and South
    Dakota, want to see the recovery efforts continue and expand.
        The Corps, Fish and Wildlife Service and many State agencies have
    been working on restoring habitat for fish and wildlife species along
    the river. This work is critical for the Interior Least Tern and Pallid
    Sturgeon, which are listed as endangered under the Endangered Species
    Act, and the Piping Plover, which is listed as threatened. Moreover,
    the positive impacts of restoration extend to all fish and wildlife
    throughout the region.
        A recent study conducted by the Fish and Wildlife Service near
    Lisbon Bottoms in Missouri showed that over twice as many fish species
    were utilizing the created shallow water habitat (SWH) areas as the
    main channelized section of the river. A Corps' study has shown that
    the emergent sandbar habitat (ESH) projects have had tremendous
    response from nesting terns and plovers. These habitat restoration
    projects are working with the river--not against it.
        These projects have also been a boon for recreation along portions
    of the river. Anglers, hunters, boaters and others have been using some
    of these areas proving the old adage ``if you build it, they will
    come.'' Although the majority of the population lives in the lower
    basin, most recreational spending is currently occurring in the upper
    basin because facilities and opportunities are more abundant. These
    developed habitat projects are bringing people back to the river in the
    lower Missouri basin.
        In addition to boosting the economy through tourism, restoration
    projects can provide near-term economic stimulus in small communities
    throughout the region. As Congress and the administration considered
    the stimulus package earlier this year, the Corps identified $26
    million in restoration projects that could commence this spring and
    summer in Nebraska, Iowa, South Dakota and other basin States. In
    general, these projects involved removing barriers to fish passage on
    the Yellowstone River in Montana as well as restoring and creating
    habitat for terns, plovers and pallid sturgeon in the middle and lower
    basin. To perform this work, the Corps would contract with local
    construction companies, which would create or maintain jobs and inject
    dollars into the local economy through purchases of materials, fuel,
    food and lodging. Although these projects were not funded by the
    Recovery Act, with an appropriation of at least $70 million, the Corps
    could implement some of them next year. Doing so could help propel
    economic recovery at the community level at a time when we hope the
    national economy will also be improving.
        The League encourages the subcommittee to provide at least $70
    million for recovery and restoration efforts along the Missouri River.
    Benchmarks have been set by the Biological Opinion establishing goals
    for habitat restoration. With adequate funding and a lot of hard work
    on the ground, we can meet these goals and restore critical segments of
    America's longest river.
        We appreciate the opportunity to submit testimony and look forward
    to working with the subcommittee to strengthen the investment in
    ecosystem restoration and recovery along the Upper Mississippi and
    Missouri rivers.
                                     ______

            Prepared Statement of the Little River Drainage District

        Dear Congressman Visclosky, my name is Dr. Sam M. Hunter, DVM of
    Sikeston, Missouri. I am a veterinarian, landowner, farmer and resident
    of Southeast Missouri.
        I am the President of the Little River Drainage District, the
    largest such entity in the Nation. Our District serves as an outlet
    drainage and flood control District to parts of seven counties in
    Southeast Missouri. We provide flood control protection to a sizable
    area of Northeast Arkansas as well. Our District is solely tax
    supported by more than 3,500 private landowners in Southeast Missouri.
        My remarks will be directed toward the Mississippi River and
    Tributaries Project (MR&T) and the St. Francis River Basin portion of
    the MR&T. Those funds when properly expended are investments yielding a
    return of substantial benefits to the American taxpayer throughout this
    Nation. They are used to prevent flooding to much of our valuable
    farmland, to industrial sites, and to upgrade our ever aging locks and
    dam system on our navigable streams which will prevent unscheduled lock
    closures, modernize our hydro-electric plants, and restore some of our
    environmental assets. MR&T authorized by Congress in 1928 and still not
    completed is returning back to our Nation $25 for every $1 expended.
    What a good investment!!
        We are pleased to learn of the recent passage of the Omnibus bill
    for fiscal year 2009 and the Stimulus bill. The Omnibus bill provides
    $375 million for the MR&T Project for fiscal year 2009. The stimulus
    funding will likewise provide additional funds to improve much needed
    work on this excellent project. The Corps has a stated capability
    exceeding both amounts and will be able to execute those funds
    promptly.
        Many jobs will be realized and many products will be purchased
    throughout the entire Mississippi Valley and the watershed which
    discharge into this system. We must put people back to work and this
    should help in some small way. However, there still remains room for
    more funding. This District supports the request of the Mississippi
    Valley Flood Control Association for funding levels at $500 million for
    the MR&T Project. This project as well as all of the subsidiary
    projects within are returning back to the U.S. Treasury a minimum of $6
    for each $1 invested.
        We believe Congress needs to intervene and reverse the trend of
    OMB, and of past administrations. We have not seriously invested in our
    waterway infrastructure for decades but we MUST. Local economies will
    be affected positively by these investments. Local labor will be used
    as well as local businesses who will provide needed materials. This
    would be a major boost to our economy. Each year OMB and recent
    administrations have submitted low budget amounts for this worthwhile
    project and we have had to rely on Congress to ``fix'' the problem. You
    should not be burdened with this task. Someone needs to inform OMB what
    projects need funding which are assets to our Nation and not a
    liability.
        We must prioritize projects and eliminate projects that are not
    returning benefits back to this Nation. We must have our Federal
    Government live up to the commitments they have made to the citizens of
    this Nation. Private interests have made many investments based upon
    faith in the Federal Government following through on what it promised
    and what they had been told would be provided to them within a
    reasonable period of time. If a project is to be funded entirely by the
    Federal Government as directed by Congress then we must fulfill that
    obligation. If local interest is to provide a portion of the cost then
    local interest must meet that mandate as well. However, we do not need
    to hold any projects up because local interests are not financially
    able to meet their cost sharing needs provided that project returns a
    benefit back to this Nation. Let us move forward with a plan and let us
    work that plan and rebuild and bring our waterway infrastructure into
    the 21st century properly.
        Investing in our waterways is a great way to stimulate the economy,
    which currently is very much needed, and at the same time be building
    and making investments into a system for the future which will return
    back more dollars than expended. We petition you to give this vital
    industry of our Nation a strong endorsement and do all you can to
    ensure our waterways system and carriers stay competitive with our
    foreign competitors.
        I have the following comments for your benefit and consideration:

                             STIMULUS BILL FUNDING

        The Corps stated a capability to execute $12-$15 billion yet were
    only allocated $4.6 billion. This amount is gratefully appreciated but
    is a mere ``down payment'' to improve and upgrade our deteriorated
    infrastructure. Thousands of jobs could be generated should the Corps
    capability be met. The Corps continues the premier engineering and
    construction arm of the Federal Government. We need to let them do what
    they do best.

                                 INFRASTRUCTURE

        The current administration stated often during its campaign and
    after that a genuine concerted priority would be to invest in this
    country's future, namely, its infrastructure.
        Our Federal road systems are crumbling! We must not wait for
    bridges to fail before we act. We need to move forward across our
    entire Nation upgrading our Federal highway system in its entirety.
    This will take long term commitments not just a ``stimulus'' now and
    then. We need to put a plan in place, work the plan and fund it
    properly.
        Are we truly interested in fuel independence--a cleaner
    environment--a better economy? If we are why don't we have someone step
    forward and be a champion for our ``waterways'' system? We have locks
    and dams which are an average of 50 years old. Parts are having to be
    fabricated since they are no longer manufactured. Tows are having to be
    broken up to pass because our locks and dams are too short and not
    modernized. Many undue delays are occurring. This does not permit our
    carriers to compete fairly with the foreign shipping industry. We must
    start a concerted effort to improve this part of our Nation's
    infrastructure.
        Locks, dams, hydropower, recreation, flood control, water supplies
    and all other benefits from the construction, operation and maintenance
    of these features on our rivers benefit our entire Nation not just a
    few. It is a national asset and it must be operated and funded as a
    national benefit. Private industry can not and will not operate this
    system fairly and in the best interest of our Nation.
        Environmentally moving goods and freight throughout our Nation via
    water is much cleaner, less intrusive and far more environmentally
    acceptable than highways or rail. Noise pollution, air pollution, land
    pollution are substantially less when we move the mass amount of goods
    possible by water.
        Fuel efficiency comparison is a ``no brainer''! For instance 1
    gallon of fuel moves 155 tons of freight by truck, 413 tons of freight
    by rail and 576 tons of freight by water. What part of this do we not
    understand? Why can't we realize such an endeavor would reduce much of
    our fuel needs and take much pressure off our highway system?
        Economically investing wisely in our waterways effects much of our
    Nation--not just a regional portion. Consider it being possible to
    board a waterborne vessel at the Port of New Orleans, Louisiana and one
    can touch 36 States of this Nation and 6 provinces in Canada without
    ever getting onto land. Over 75 percent of our population lives along
    water. Only two of our major cities are not on water, namely, Atlanta,
    Georgia and Denver, Colorado. With the many ports throughout the
    Mississippi Valley, which network many more people inland, it is
    evident many local economies will be benefitted when investments are
    made in our water infrastructure.
        We seem to be ready, willing and capable of improving the
    infrastructure of other Nations at the expense of our taxpayers but
    seem reluctant to do the same for our Nation. It is far past time to
    reward the American taxpayer with a return for the money he provides
    each year and stop using those funds to benefit those Nations who are
    our enemies.
        It has been estimated our waterway infrastructure needs $100-$120
    billion to modernize, upgrade and be made functional. Lets start now by
    setting a 10 year goal to modernize that system and then plan to meet
    that goal and exceed same when possible. Currently we are spending $13-
    $15 billion per month to fight terrorism in Iraq and Afghanistan which
    is more spent in 1 year of what is needed to bring our waterways up to
    a finished plan. Perhaps we could cut the 10 year plan to even 5 years
    by eliminating much of that funding. Lets try!
        I wish to thank you very much for your time and kind attention and
    for taking the time to review the above. We would be very appreciative
    of anything this subcommittee can do to help us improve our
    environment, improve our livelihood, and improve the area in which we
    live and work which ultimately is good for America. We are also very
    appreciative of all this subcommittee has done for us in the past. We
    trust you will hear our pleas once more and act accordingly.
                                     ______

      Prepared Statement of Mayor Sara Presler, City of Flagstaff, Arizona

        Chairman Dorgan, Ranking Member Bennett, and distinguished members
    of the subcommittee, thank you for allowing me to testify on behalf of
    the city of Flagstaff, Arizona in support of $23 million in the Army
    Corps of Engineers budget for the Rio de Flag flood control project in
    fiscal year 2010. The Rio de Flag flood control project is critically
    important to the city, to northern Arizona, and, ultimately, to the
    Nation.
        As you may know, Mr. Chairman, with this subcommittee's help over
    the last several fiscal years, Rio de Flag received more than $15
    million to continue construction on this important project. We are
    extremely grateful that the subcommittee boosted this project well
    above the President's request every year, and we would appreciate your
    continued support for this project in fiscal year 2010.
        Furthermore, the amount of money invested in this project by the
    Federal Government--approximately $54 million (authorized by WRDA)--
    will be saved exponentially in costs to the Federal Government in the
    case of a large and catastrophic flood, which could be more than $450
    million. It will also promote economic growth and redevelopment along
    areas that are currently underserved because of the flood potential.
        Like many other projects under the Army Corps's jurisdiction, Rio
    de Flag received no funding in the President's fiscal year 2010 budget,
    although the Corps has expressed a capability of $23 million to
    continue construction on the project and unwavering commitment to the
    project. We are hopeful that the subcommittee will fund the Rio de Flag
    project at $23 million when drafting its bill in order to keep the
    project on an optimal schedule.
        Flooding along the Rio de Flag dates back as far as 1888. The Army
    Corps has identified a Federal interest in solving this long-standing
    flooding problem through the Rio de Flag, Flagstaff, Arizona--
    Feasibility Report and Environmental Impact Study (EIS). The
    recommended plan contained in this feasibility report was developed
    based on the following opportunities: (1) flood control and flood
    damage reduction; (2) environmental mitigation and enhancement; (3)
    water resource management; (4) public recreation; and (5) redevelopment
    opportunities. This plan will result in benefits to not only the local
    community, but to the region and the Nation.
        The feasibility study by the Corps of Engineers has revealed that a
    500-year flood could cause serious economic hardship to the city. In
    fact, a devastating 500-year flood could damage or destroy
    approximately 1,500 structures valued at more than $450 million.
    Similarly, a 100-year flood would cause an estimated $100 million in
    damages. In the event of a catastrophic flood, over half of Flagstaff's
    population of more than 60,000 would be directly impacted or affected.
        In addition, a wide range of residential, commercial, downtown
    business and tourism, and industrial properties are at risk. Damages
    could also occur to numerous historic structures and historic Route 66.
    The Burlington Northern & Santa Fe Railway (BNSF), one of the primary
    east-west corridors for rail freight, could be destroyed, as well as
    U.S. Interstate 40, one of the country's most important east-west
    interstate links. Additionally, a significant portion of Northern
    Arizona University (NAU) could incur catastrophic physical damages,
    disruptions, and closings. Public infrastructure (e.g., streets,
    bridges, water, and sewer facilities), and franchised utilities (e.g.,
    power and telecommunications) could be affected or destroyed.
    Transportation disruptions could make large areas of the city
    inaccessible for days.
        Mr. Chairman, the intense wildfires that have devastated the West
    during the last several years have only exacerbated the flood potential
    and hazard in Flagstaff. An intense wildfire near Flagstaff could strip
    the soil of ground cover and vegetation, which could, in turn, increase
    runoff and pose an even greater threat of a catastrophic flood.
        In short, a large flood could cripple Flagstaff for years. This is
    why the city believes it is important to ensure that this project
    remains on schedule and that the Corps is able to utilize its expressed
    capability of $23 million in fiscal year 2010 for construction of this
    flood control project.
        In the city's discussions with the Corps, both the central office
    in Washington and its Los Angeles District Office also believe that the
    Rio de Flag project is of the utmost importance and both offices
    believe the project should be placed high on the subcommittee's
    priority list. We are hopeful that the subcommittee will consider this
    advice and also place the project high on its priority list and fully
    fund the project at $23 million for fiscal year 2010.
        It is important to note that the city has secured the necessary
    property rights to begin construction, and the city is prepared to
    assume the costs for the non-Federal portion of the cost-sharing
    agreement.
        The city of Flagstaff, as the non-Federal sponsor, is responsible
    for all costs related to required Lands, Easements, Rights-of-Way,
    Relocations, and Disposals (LERRD's). The city has already secured the
    necessary property rights to begin construction in 2004. Implementation
    of the city's Downtown and Southside Redevelopment Initiatives ($100
    million in private funds) are entirely dependent on the successful
    completion of the Rio de Flag project. The Rio de Flag project will
    also provide a critical missing bike/pedestrian connection under Route
    66 and the BNSF Railroad to replace the existing hazardous at grade
    crossings.
        Mr. Chairman, the Rio de Flag project is exactly the kind of
    project that was envisioned when the Corps was created because it will
    avert catastrophic floods, it will save lives and property, and it will
    promote economic growth. In short, this project is a win-win for the
    Federal Government, the city, and the surrounding communities.
        In conclusion, the Rio de Flag project should be considered a high
    priority for this subcommittee, and I encourage you to support full
    funding of $23 million for this project in the fiscal year 2010 Energy
    and Water Development Appropriations bill. Thank you in advance for
    your consideration.
                                     ______

       Prepared Statement of the Board of Mississippi Levee Commissioners

        Mr. Chairman and members of the subcommittee, this statement is
    prepared by Peter Nimrod, Chief Engineer for the Board of Mississippi
    Levee Commissioners, Greenville, Mississippi, and submitted on behalf
    of the Board and the citizens of the Mississippi Levee District. The
    Board of Mississippi Levee Commissioners is comprised of seven elected
    commissioners representing the counties of Bolivar, Issaquena, Sharkey,
    Washington, and parts of Humphreys and Warren counties in the Lower
    Yazoo Basin in Mississippi. The Board of Mississippi Levee
    Commissioners is charged with the responsibility of providing
    protection to the Mississippi Delta from flooding of the Mississippi
    River and maintaining major drainage outlets for removing the flood
    waters from the area. These responsibilities are carried out by
    providing the local sponsor requirements for the congressionally
    authorized projects in the Mississippi Levee District. The Mississippi
    Levee Board and the Mississippi Valley Flood Control Association
    support an appropriation of $500 million for fiscal year 2010 for the
    Mississippi River and Tributaries Project. This is the minimum amount
    that we consider necessary to allow for an orderly completion of the
    remaining work in the Valley and to provide for the operation and
    maintenance, as required, to prevent further deterioration of the
    completed flood control and navigation work.
        It is apparent that the administration loses sight of the fact that
    the Mississippi River and Tributaries Project provides protection to
    the Lower Mississippi Valley from waters generated across 41 percent of
    the Continental United States. These waters flow from 31 states and 2
    provinces of Canada and must pass through the Lower Mississippi Valley
    on its way to the Gulf of Mexico. We will remind you that the
    Mississippi River and Tributaries Project is one of, if not the most
    cost effective project ever undertaken by the United States Government.
    The foresight of the Congress in their authorization of the many
    features of this project is exemplary.
        The many projects that are part of the Mississippi River and
    Tributaries Project not only provide protection from flooding in the
    area, but the award of construction contracts throughout the Valley
    provides assistance to the overall economy of this area. The employment
    of the local workforce and purchases from local vendors by the
    contractors help stabilize the economy in one of the most impoverished
    areas of our country.
        Thanks to the additional funding provided by the Congress over the
    last several years over and above the administration's budget, work on
    the Mainline Mississippi River Levee Enlargement Project is continuing.
    Of the original 69 miles of deficient levees in the Mississippi Levee
    District, 23.2 miles of work has been completed, 12.2 miles are
    currently under contract, and another 4.7 miles will be awarded in late
    Summer, 2009. We are requesting $69.972 million for construction on the
    Mainline Mississippi River Levees in the Lower Mississippi Valley
    Division which will allow the Vicksburg and Memphis districts to keep
    existing contracts on schedule and award contracts to avoid any future
    unnecessary delays in completing this vital project. We are all well
    aware that the Valley some day will have to endure a Project Flood, we
    just don't know when. We must be prepared.
        The President's fiscal year 2010 budget did not include funding for
    any construction projects within the Yazoo Basin. This action is
    especially difficult to understand during a time when our Nation needs
    an economic boost. These are all projects authorized and funded so
    wisely by the Congress. All of these projects are encompassed in the
    footprint of the Delta Regional Authority, an area recognized by the
    Congress as requiring special economic assistance to keep pace with the
    rest of our great Nation. We can not lose sight of the fact that all of
    these projects are required to return more than a dollar in benefits
    for each dollar spent.
        The Final Report for the Yazoo Backwater Project was released in
    late 2007. The Yazoo Backwater Project will provide economic and
    environmental benefits to parts of six counties in the south
    Mississippi Delta. This project will build a pump that will evacuate
    floodwater that is generated over 4,093 square miles in the Mississippi
    Delta. The pump will lower the 100-year flood event by 4.5 feet thereby
    reducing urban and rural structural damages, providing benefits to the
    remaining agricultural lands, and reducing the frequency and duration
    of floods. Reforestation easements will be purchased on up to 55,600 of
    existing agricultural land which will provide benefits in every
    environmental category--wetlands, terrestrial, aquatics, and waterfowl
    resources as well as vastly improving water quality. The recommended
    plan for the Yazoo Backwater Project will balance economics with the
    environment. This is a model project that should be the standard for
    future public works projects in the United States. On August 31, 2008,
    EPA wrongly used it's authority under section 404(c) of the Clean Water
    Act (CWA) to veto the Yazoo Backwater Project even though it is exempt
    by section 404(r) of the CWA. We are requesting this project be funded
    by the Congress in the amount of $5 million. These funds will allow the
    Corps to begin acquisition of the reforestation easements and initiate
    the award of the pump supply contract.
        The Draft Supplemental Environmental Impact Statement for the Big
    Sunflower River Maintenance Project will be released next year. This
    maintenance project will restore flood control capacities to 130 miles
    of channels by removing sediment that has built up over the past 40
    years since the channels were originally improved. Our request for
    $5.591 million will allow right-of-way acquisition to continue and for
    the award of the first dredging contract. The residents in the
    Mississippi Delta continue to suffer damages from flooding while they
    wait for this maintenance project to reach their area.
        Work on the Delta Headwaters Project has proven effective in
    reducing sediments to downstream channels. To discontinue this project
    will only diminish water quality by increasing sediment, reducing the
    level of protection to the citizens of the Delta and increasing
    required maintenance. We are requesting $25 million to continue this
    project.
        The Upper Yazoo Project is critical to the Delta. The Corps of
    Engineers operates four major flood control reservoirs on the bluff
    hills overlooking the Mississippi Delta. These reservoirs hold back
    heavy spring rains and must have adequate outlet channel capacity to
    pass this excess runoff during the summer and fall months. Without
    completion of the Upper Yazoo Project, the Corps is forced to hold
    flood water from the previous spring, thereby reducing the ability to
    provide protection from the current year's flood water. We urge the
    Congress to provide $24.5 million allowing construction to continue and
    the award of additional channel enlargement items.
        Maintenance of completed works can not be over looked. The four
    flood control reservoirs over looking the Delta have been in place for
    50 years and have functioned as designed. Required maintenance must be
    performed to avoid any possibility of failure during a flood event. We
    are asking for $13.793 million for Arkabutla Lake, $12.69 million for
    Enid Lake, $13.231 million for Grenada Lake, and $14.483 million for
    Sardis Lake.
        We are requesting $13.522 million for Maintenance of the Mainline
    Mississippi River Levees in the Lower Mississippi Valley Division which
    will provide for repair of levee slides, slope repair, and repair of
    the gravel maintenance roadway which is so vital to access during high
    water.
        The Environmental Protection Agency (EPA) has been given too much
    power under section 404(c) of the Clean Water Act (CWA) which allows
    EPA to veto Congressionally authorized projects. During the early
    1990s, due to abuse of the 404(c) power by EPA, Congress considered
    removing this authority from EPA. EPA has again invoked this veto power
    on the Yazoo Backwater Project. EPA is saying that you can't lower the
    water level with a flood control project! By killing this project with
    404(c) veto authority, EPA is drawing a line in the sand over the
    future of flood control in our great Nation. EPA has vetoed the Yazoo
    Backwater Project even though it was approved, authorized and funded by
    Congress and exempt from a 404(c) veto by 404(r). It is now time to
    again take up this issue and remove the 404(c) veto power from EPA
    before they kill another flood control project that has been authorized
    by Congress.
        As Members of the Congress representing the citizens of our Nation
    who live with the Mississippi River everyday, you clearly understand
    both the benefits provided by this resource, and the destructive force
    that must be controlled during a flood. On behalf of the Mississippi
    Levee Board, I can not express enough, our appreciation for your
    efforts in providing adequate funding over the last several years that
    has allowed construction to continue on our much needed projects and
    thank you in advance for your kind consideration of our requests for
    fiscal year 2010.
                                     ______

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

       Prepared Statement of Dave Freudenthal, Governor, State of Wyoming

        Dear Chairman Dorgan and Senator Bennett, I am requesting your
    support for an appropriation of $3,569,000 to the Bureau of Reclamation
    included in the President's fiscal year 2010 recommended budget in the
    Upper Colorado Region budget line item entitled ``Endangered Species
    Recovery Implementation Program.'' This budget line-item designates
    $1,950,000 for construction and construction management activities for
    the San Juan River Basin Recovery Implementation Program; $1,219,000
    for construction and construction management activities for the Upper
    Colorado River Endangered Fish Recovery Program; and $400,000 for Fish
    and Wildlife Management and Development activities to avoid jeopardy.
        The Upper Colorado and San Juan recovery programs' objectives are
    to recover endangered fish species while water use and development
    proceeds in compliance with the Federal Endangered Species Act. Since
    1988, these programs have provided ESA section 7 compliance (without
    litigation) for nearly 1,800 Federal, tribal, State and privately
    managed water projects depleting more than 3 million acre-feet of water
    per year. These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. Substantial non-Federal cost-sharing funding
    exceeding 50 percent is embodied in both programs.
        The Department of the Interior recognized these programs with the
    Department of the Interior's Cooperative Conservation Award in April
    2008 as national model efforts demonstrating that collaborative
    conservation partnerships can successfully work to recover endangered
    species while addressing water needs to support growing western
    communities in a manner that fully respects State water law and
    interstate river compacts.
        We request the subcommittee's assistance for fiscal year 2010
    funding to ensure the Bureau of Reclamation's continuing financial
    participation, as authorized and directed by Public Law 106-392, as
    amended, in these two region-wide cooperative recovery programs. The
    State of Wyoming thanks you for the past support and assistance of your
    subcommittee; it has greatly facilitated the success of these multi-
    state, multi-agency programs.
                                     ______

      Prepared Statement of Jon M. Huntsman, Jr., Governor, State of Utah

        Dear Chairman Dorgan and Senator Cochran, this letter serves to
    respectfully request your support for an appropriation of $3,569,000 to
    the Bureau of Reclamation included in the President's fiscal year 2010
    recommended budget in the Upper Colorado Region budget line item
    entitled ``Endangered Species Recovery Implementation Program,'' This
    budget line-item designates $1,950,000 for construction and
    construction management activities for the San Juan River Basin
    Recovery Implementation Program; $1,219,000 for construction and
    construction management activities for the Upper Colorado River
    Endangered Fish Recovery Program; and $400,000 for Fish and Wildlife
    Management and Development activities to avoid jeopardy.
        The Upper Colorado and San Juan recovery programs' objectives are
    to recover endangered fish species while water use and development
    proceeds in compliance with the Federal Endangered Species Act. Since
    1988, these programs have provided ESA section 7 compliance (without
    litigation) for neatly 1,800 Federal, tribal, State and privately
    managed water projects depleting more than 3 million acre-feet of water
    per year. These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power, and
    environmental interests. Substantial non-Federal cost-sharing funding
    exceeding 50 percent is embodied in both programs.
        The Department of the Interior recognized these programs with the
    DOI's Cooperative Conservation Award in April 2008 as national model
    efforts demonstrating that collaborative conservation partnerships can
    successfully work to recover endangered species while addressing water
    needs to support growing western communities in a manner that fully
    respects State water law and interstate river compacts.
        Utah requests the subcommittee's assistance for fiscal year 2010
    funding to ensure the Bureau of Reclamation's continuing financial
    participation as authorized and directed by Public Law 106-392, as
    amended, in these two region-wide cooperative recovery programs. On
    behalf of the State of Utah, I thank you for the past support and
    assistance of your subcommittee; it has greatly facilitated the success
    of these multi-state, multi-agency programs.
                                     ______

      Prepared Statement of Bill Richardson, Governor, State of New Mexico

        Dear Chairman Dorgan and Senator Cochran, I am requesting. your
    support for an appropriation of $3,569,000 to the Bureau of Reclamation
    included in the President's fiscal year 2010 recommended budget in the
    Upper Colorado Region budget line item entitled ``Endangered Species
    Recovery Implementation Program.'' This budget line-item designates
    $1,950,000 for construction and construction management activities for
    the San Juan River Basin Recovery Implementation Program; $1,219,000
    for construction and construction management activities for the Upper
    Colorado River Endangered Fish Recovery Program: and $400,000 for Fish
    and Wildlife Management and Development activities to avoid jeopardy.
        The requested fiscal year 2010 appropriation for to San Juan River
    Recovery Program will be used for construction of critically needed
    fish passage structures in critical habitat on the San Juan River as
    well as providing for program management and development.
        The Upper Colorado and San Juan recovery programs' objectives are
    to recover endangered fish species while water use and development
    proceeds in compliance with the Federal Endangered Species Act. Since
    1988, these programs have provided ESA section 7 compliance (without
    litigation) for nearly 1,800 Federal, tribal, State and privately
    managed water projects depleting more than 3 million acre-feet of water
    per year. These highly successful cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. Substantial non-Federal cost-sharing funding
    exceeding 50 percent is embodied in both programs.
        The Department of the Interior recognized these programs with the
    Department of the Interior's Cooperative Conservation Award in April
    2008 as national model efforts demonstrating that collaborative
    conservation partnerships can successfully work to recover endangered
    species while addressing water needs to support growing western
    communities in a manner that fully respects State water law and
    interstate river compacts.
        We request the subcommittee's assistance for fiscal year 2010
    funding to ensure the Bureau of Reclamation's continuing financial
    participation, as authorized and directed by Public Law 106-392, as
    amended, in these two region wide cooperative recovery programs. The
    State of New Mexico thanks you for the past support and assistance of
    your subcommittee; it has greatly facilitated the success of these
    multi-state, multi-agency programs.
                                     ______

      Prepared Statement of Bill Ritter,. Jr., Governor, State of Colorado

        Dear Chairman Dorgan and Senator Bennett, I am requesting your
    support for an appropriation of $3,569,000 to the Bureau of Reclamation
    included in the President's fiscal year 2010 recommended budget in the
    Upper Colorado Region budget line item entitled ``Endangered Species
    Recovery Implementation Program.'' This budget line-item designates
    $1,950,000 for construction and construction management activities for
    the San Juan River Basin Recovery Implementation Program; $1,219,000
    for construction and construction management activities for the Upper
    Colorado River Endangered Fish Recovery Program; and $400,000 for Fish
    and Wildlife Management and Development activities to avoid jeopardy.
        These programs are long-standing partnerships among the States of
    Colorado, New Mexico, Utah and Wyoming, Indian tribes, Federal
    agencies, and water, power and environmental interests. These programs
    are successful and collaborative efforts that merit continued support
    by the Federal Government as a model method to recover threatened and
    endangered species, while allowing water development to occur in a
    manner that complies with the Endangered Species Act.
        The Department of the Interior recognized these programs with the
    Department of the Interior's Cooperative Conservation Award in April
    2008 as national models demonstrating that collaborative conservation
    partnerships can successfully work to recover endangered species while
    addressing water needs to support growing western communities in a
    manner that fully respects State water law and interstate river
    compacts. Since 1988, these programs have provided ESA compliance
    (without litigation) for nearly 1,800 Federal, tribal, State and
    privately managed water projects depleting more than 3 million acre-
    feet of water per year. Substantial non-Federal cost-sharing funding
    exceeding 50 percent is embodied in both of these programs as
    authorized by Public Law 106-392, as amended.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-state, multi-agency programs. On
    behalf of the State of Colorado, I thank you for that support and I
    request the subcommittee's assistance, for fiscal year 2010 funding, to
    ensure the Bureau of Reclamation's continuing and vitally important
    financial participation in these regional cooperative recovery
    programs.
                                     ______

           Prepared Statement of the Wyoming Water Association (WWA)

        Dear Chairman Dorgan and Senator Bennett, on behalf of the members
    of the Wyoming Water Association, I am requesting your support for an
    appropriation in the President's recommended budget for fiscal year
    2010 of $3,569,000 to the Bureau of Reclamation within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region. The funding designation I seek is as
    follows: $1,219,000 for construction activities for the Upper Colorado
    River Endangered Fish Recovery Program; $1,950,000 for construction
    activities for the San Juan River Basin Recovery Implementation
    Program; and $400,000 for Fish and Wildlife Management and Development
    activities to avoid jeopardy. This funding is authorized by Public Law
    106-392, as amended, and is included in the President's recommended
    budget for fiscal year 2010 within the Bureau of Reclamation's
    ``Endangered Species Recovery Implementation Program'' budget line-
    item.
        Founded in 1933, the Wyoming Water Association (WWA) is a Wyoming
    non-profit corporation and voluntary organization of private citizens,
    elected officials, and representatives of business, government
    agencies, industry and water user groups and districts. The
    Association's objective is to promote the development, conservation,
    and utilization of the water resources of Wyoming for the benefit of
    Wyoming people. The WWA provides the only statewide uniform voice
    representing all types of water users within the State of Wyoming and
    encourages citizen participation in decisions relating to multi-purpose
    water development, management and use.
        The Wyoming Water Association is a participant in the Upper
    Colorado River Endangered Fish Recovery Program. That program, and its
    sister program within the San Juan River Basin, are ongoing
    partnerships among the States of Colorado, New Mexico, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Federal Endangered Species Act. The Department of
    the Interior continues to recognize these programs as national models
    demonstrating that collaboratively partnerships can successfully work
    to recover endangered species while addressing water needs to support
    growing western communities in a manner that fully respects State water
    law and interstate compacts. Since 1988, these programs have provided
    ESA section 7 compliance (without litigation) for over 1,600 Federal,
    tribal, State and privately managed water projects depleting more than
    3 million acre-feet of water per year.
        The requested fiscal year 2010 appropriation will allow the San
    Juan River Recovery Implementation Program to complete a fish passage
    facility on the San Juan River and to initiate planning and design for
    a proposed similar structure in a following year. The funding for the
    Upper Colorado Recovery Program will be used for pre-construction
    efforts prior to the anticipated award of a contract in fiscal year
    2011 to construct a fish screen to avoid entrapment and a water
    conservation and canal automation project to provide additional water
    supplies for the endangered fishes. Substantial non-Federal cost-
    sharing funding exceeding 50 percent is being provided for the capital
    construction projects benefiting the endangered fish and their habitats
    associated with both of these successful programs.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-state, multi-agency programs. On
    behalf of the members of the Wyoming Water Association, thank you for
    that support. We again request the subcommittee's assistance, with
    regard to fiscal year 2010 funding, to ensure the Bureau of
    Reclamation's continuing financial participation in these vitally
    important programs.
                                     ______

              Prepared Statement of the Southern Ute Indian Tribe

        Dear Chairman Dorgan and Senator Bennett, on behalf of the Southern
    Ute Indian Tribe, I am requesting your support for an appropriation in
    the President's recommended budget for fiscal year 2010 of $3,569,000
    to the Bureau of Reclamation (``Reclamation'') within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region. The funding designation the Tribe seeks
    on behalf of Reclamation is as follows: $1,219,000 for construction
    activities for the Upper Colorado River Endangered Fish Recovery
    Program; $1,950,000 for construction activities for the San Juan River
    Basin Recovery Implementation Program; and $400,000 for Fish and
    Wildlife Management and Development activities to avoid jeopardy. This
    funding is authorized by Public Law 106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, the Southern Ute Indian Tribe, the Ute Mountain Ute Indian
    Tribe, the Navajo Nation, and the Jicarilla Apache Nation, Federal
    agencies and water, power and environmental interests. The programs'
    objectives are to recover endangered fish species while water use and
    development proceeds in compliance with the Endangered Species Act.
        The tribe appreciates the subcommittee's past support and requests
    the subcommittee's assistance for fiscal year 2010 funding to ensure
    Reclamation's continuing financial participation in these vitally
    important programs.
                                     ______

      Prepared Statement of the Fort Peck Reservation Rural Water System
    (Public Law 106-382), Assiniboine and Sioux Rural Water System, and the
                         Dry Prairie Rural Water System

                             BUREAU OF RECLAMATION

    Fiscal Year Budget Request
        The Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural
    Water respectfully request fiscal year 2010 appropriations of
    $44,649,000 for the Bureau of Reclamation rural water program. The
    project is 22 percent complete. It has progressed well subject to
    available funds.
        Fiscal year 2010 funds will be used to construct critical elements
    of the Fort Peck Reservation Rural Water System, Montana, (Public Law
    106-382, October 27, 2000). The amount requested is based on need to
    build Phase II of the regional water treatment plant, pipelines to
    connect with the Town of Poplar and Dry Prairie systems on the east and
    west sides project. The request is within capability to spend funds in
    fiscal year 2010 and is set out in Table 1. The Schedule of Activities
    and Cash Flow analysis to build the major features of the regional
    system (water treatment plant and common pipelines) is included as
    Attachment A and demonstrate capability to use funds.

        TABLE 1.--FISCAL YEAR 2010 FUNDING REQUEST FORT PECK RESERVATION RURAL WATER SYSTEM (PUBLIC LAW 106-382)
    ----------------------------------------------------------------------------------------------------------------
                             Project Feature                              Federal       Non-Federal        Total
    ----------------------------------------------------------------------------------------------------------------
                            Fort Peck Tribes

    Water Treatment Plant:
        Phase I, Clear Well Wash Water Recovery.....................  ..............  ..............  ..............
        Phase II, Main Treatment....................................     $20,317,000  ..............     $20,317,000
    Pipelines:
        Water Treatment Plant to Poplar.............................      10,763,000  ..............      10,763,000
        Water Treatment Plant to Wolf Point.........................  ..............  ..............  ..............
    FP OM Buildings.................................................         558,000  ..............         558,000
                                                                     -----------------------------------------------
          Subtotal..................................................      31,638,000  ..............      31,638,000
                                                                     ===============================================
                               Dry Prairie

    Big Muddy to Plentywood.........................................       4,739,000      $1,496,000       6,235,000
    Fort Kipp.......................................................         219,000          69,000         288,000
    Porcupine Creek to Opheim:
        St. Marie to Nashua.........................................       4,619,000       1,458,000       6,077,000
        St. Marie to Opheim.........................................       3,434,000       1,084,000       4,518,000
                                                                     -----------------------------------------------
          Subtotal..................................................      13,011,000       4,107,000      17,118,000
                                                                     ===============================================
          Total.....................................................      44,649,000       4,107,000      48,756,000
    ----------------------------------------------------------------------------------------------------------------

    Funding Status and Needs
        As shown in Table 2 below, the project will be 22 percent complete
    at the end of fiscal year 2009. Construction funds remaining to be
    spent after fiscal year 2009 will total $225.061 million within the
    current authorization (in October 2008 dollars). Administrative costs
    of extending the project completion to fiscal year 2015 and
    construction costs outside the authorized ceiling increase remaining
    costs to $245.969 million before considering inflation. Inflation at
    7.5 percent over the next 6 years, the average rate over the last 5
    years in Reclamation construction projects, is expected to increase
    remaining project costs to $314.001 million if the project is completed
    in fiscal year 2015. An average $52.33 million annually is required to
    complete the project by 2015 considering all factors. The project is
    seeking an amendment of Public Law 106-382 in this session of Congress
    to extend the project completion to December 31, 2015.

                       TABLE 2.--FUNDING STATUS AND NEEDS
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Total Federal Funding Authority (October 2008 $)........    $289,110,000
    Federal Funds Expended Through Fiscal Year 2009.........     $64,049,000
    Percent Complete........................................           22.15
    Amount Remaining After Fiscal Year 2009:
        Total Authorized (October 2008 $)...................    $225,061,000
        Overhead Adjustment for Extension to Fiscal Year        $245,969,000
         2015 and Other.....................................
        Adjusted for Inflation to Fiscal Year 2015 at 7.46      $314,001,000
         Percent Annually...................................
    Years to Complete.......................................               6
    Average Annual Required to End in Fiscal Year 2015 (Need     $52,333,000
     Extension of Public Law 106-382).......................
    Fiscal Year 2010 Amount Requested.......................     $44,649,000
    ------------------------------------------------------------------------

        The request ($44.649 million) is less than the average annual
    appropriations needed to complete the project in fiscal year 2015
    ($52.333 million annually), and is within the capability of the project
    to use funds for construction. The request will create an estimated 350
    full-time equivalent (FTE) construction jobs in an area of Montana with
    low per capita income and high unemployment.
        Cost indexing from fiscal year 1998 reflecting inflation increased
    the cost of the project from $176 million to $289 million, an increase
    of $113 million. (See Attachment D). Increases in the level of
    appropriations are needed to outpace inflation, which averaged 3.35
    percent for pipelines in the first 5 years of the project, 7.46 percent
    over the last 5 years and 13.80 percent last year.
    Funding Has Not Been Adequate to Serve Any Tribal Users
        The sponsor tribes and Dry Prairie greatly appreciate the previous
    appropriations from the subcommittee that have permitted building the
    Missouri River intake (the water source), stages of the water treatment
    plant in multiple contracts, the Culbertson to Medicine Lake pipeline
    and branches serving rural users outside the Fort Peck Indian
    Reservation. However, funds have not been adequate to complete the
    water treatment plant, pipeline to Poplar and other features as
    proposed for fiscal year 2010. Service to tribal users and communities
    within the Fort Peck Indian Reservation is dependent upon completion of
    those facilities and has not been possible. No water has been delivered
    on the Fort Peck Indian Reservation.
    Proposed Activities
        Public Law 106-382 (October 27, 2000) authorized the project, which
    includes all of the Fort Peck Indian Reservation in Montana and the Dry
    Prairie portion of the project outside the Reservation in Roosevelt,
    Sheridan, Daniels and part of Valley County.
                Fort Peck Indian Reservation
        On the Fort Peck Indian Reservation the tribes have used
    appropriations from previous years to:
      --Construct the Missouri River raw water intake, a critical feature
            of the regional water project. The raw water pump station has
            been constructed, and the raw water pipeline between the
            Missouri River and the water treatment plant has been
            constructed to within 2 miles of the water treatment plant.
      --The sludge lagoons at the water treatment plant have been
            completed.
      --Phase I of the regional water treatment plant is under construction
            and will be completed in fiscal year 2009 with funds
            appropriated previously.
        The regional water treatment plant was divided into three
    construction phases over the past several years. This segregation of
    the project in smaller contracts increased the cost of the project
    significantly but was necessary due to inadequate funding to bid the
    project as a single unit, which would normally be the case. Rather than
    one contractor, there will ultimately be three contractors. Three sets
    of plans and specifications were required to coordinate new
    construction contracts with pieces already built. The Bureau of
    Reclamation approved the plans and specifications for the entire plant
    4 years ago. Capability to use funds has not been an issue.
        The remaining phase of the water treatment plant has been
    advertised for construction in contemplation of adequate funding in
    fiscal year 2010 ($20.317 million) to complete this essential component
    of the project. The bid opening is scheduled for April 7, 2009.
    American Recovery and Reinvestment Act (ARRA) of 2009 funds would
    offset the requirement for fiscal year 2010 appropriations. The project
    clearly meets the expectation of Congress for ARRA, but at the time of
    this writing, the availability of ARRA funds was not known.
        The request for fiscal year 2010 includes funds for construction of
    the essential pipelines from the water treatment plant to the community
    of Poplar (but not to Wolf Point). The pipeline to Poplar is a regional
    transmission pipeline east of the water treatment plant to serve the
    Fort Peck Indian Reservation and to eventually connect to Dry Prairie
    facilities east of the Reservation. The tribes will have capability to
    build the pipeline to Wolf Point in fiscal year 2010, which is a
    regional transmission pipeline west of the water treatment and serves
    the west sides of the Fort Peck Indian Reservation and Dry Prairie.
        The pipeline project from the water treatment plant to Poplar will
    provide a water supply from the Missouri River to replace groundwater
    contaminated by ``brine'' from oil drilling operations. The brine
    contamination is the subject of EPA orders against the responsible oil
    company. The replacement supplies will serve the community of Poplar
    and the surrounding rural area where wells have been contaminated. More
    wells are threatened. There is urgency in completing the regional
    project to Poplar before the advancing plume of contamination reaches
    existing community wells. Projections of the date that contamination
    will reach the Poplar community wells range from imminent danger to as
    much as a decade, but the anxiety of the tribes' leadership and
    membership cannot be overcome without completing the water treatment
    plant and connecting the regional pipeline to Poplar in fiscal year
    2010. This is a critical timeframe for the tribes. The staff and
    members of the subcommittee are urged to review this matter with the
    tribes and Bureau of Reclamation to clarify the urgency of completing
    necessary project facilities and alleviating the threat of
    contamination of the public water supply for the tribes' headquarters
    community of Poplar. (See Attachment E).
        The Bureau of Reclamation can confirm that the use of funds
    proposed for fiscal year 2010 is within the project's capability to
    spend (see Attachment A).
                Dry Prairie
        Dry Prairie has used previous appropriations to construct over 200
    miles of distribution pipelines from the community of Culbertson, an
    interim water source to be replaced when the regional water treatment
    plant and transmission pipeline have been completed on the Fort Peck
    Indian Reservation. The distribution system serves the communities of
    Froid and Medicine Lake and over 200 rural homes, farms and ranches.
    Pipelines were sized to serve the area north of the Missouri River,
    south of the Canadian border and between the Fort Peck Indian
    Reservation and the North Dakota border (see general location map,
    Attachment B) as funds are made available and water sources are
    expanded.
        The request for fiscal year 2010 funds of $13.011 million,
    supplemented by a non-Federal cost share of $4.107 million, will be
    used to complete pipelines starting in fiscal year 2009 to rural
    services on the west side of the Dry Prairie project between the
    communities of St. Marie and Nashua. An existing water treatment plant
    owned by the Boeing Co. at the former Glasgow Air Force Base will
    provide an interim water supply to serve the west side project until
    the regional water treatment plant of the tribes is complete and
    pipelines from Wolf Point to Nashua are constructed. The facilities
    constructed on the west side of the project are the same facilities
    required after connection of the regional water treatment plant.
    Therefore, no duplication of facilities are associated with the interim
    project.
        Dry Prairie will also assist the Assiniboine and Sioux Tribes in
    building pipelines from Culbertson on the east side of the project to
    the Reservation boundary to serve the tribal community of Fort Kipp
    with an interim water supply. The tribes are building facilities within
    the Reservation with fiscal year 2009 funding.
        Dry Prairie proposes to extend interim water supply capability
    between Culbertson and Plentywood with fiscal year 2010 funding. These
    facilities will be served from the tribes' regional water treatment
    plant when the plant and interconnecting main transmission pipelines
    are completed to Culbertson.
    Master Plan
        The project master plan is provided for review as Attachment C. The
    request for fiscal year 2010 is shown in relation to the project
    components that remain to be completed after fiscal year 2009.
    Administration's Support
        The project has reached 22 percent completion over a period of 9
    years and needs greater funding support to complete the project in
    2015. The administration's budget included the project in fiscal year
    2007 at the $5.0 million level but has not supported funds for the
    project since that time. The previous administration's support for the
    rural water program has diminished to include the Mni Wiconi and
    Garrison projects only. Congressional support is needed for the broader
    program of projects under construction.
        The tribes and Dry Prairie have worked extremely well and closely
    with the Bureau of Reclamation since the authorization of the project
    in fiscal year 2000. The Bureau of Reclamation has participated,
    reviewed and commented on the Final Engineering Report, and all
    comments were incorporated into the report. Agreement was reached on
    final presentation. OMB reviewed the Final Engineering Report prior to
    its submission to Congress in the final step of the approval process.
    The Commissioner, Regional and Area Offices of the Bureau of
    Reclamation have been consistently in full agreement with the need,
    scope, total costs, and the ability to pay analysis that supported the
    Federal and non-Federal cost shares. There have been no areas of
    disagreement or controversy in the formulation or implementation of the
    project.
        The Bureau of Reclamation collaborated with the tribes and Dry
    Prairie to conduct and complete value engineering investigations of the
    Final Engineering Report (planning), the Culbertson to Medicine Lake
    pipeline (design), the Poplar to Big Muddy River pipeline (design), the
    Missouri River intake (design) and the Regional Water Treatment plant
    (design). Each of these considerable efforts has been directed at ways
    to save construction and future operation, maintenance and replacement
    costs as planning and design proceed. Agreement with Reclamation has
    been reached in all value engineering sessions on steps to save Federal
    and non-Federal costs in the project.
        The Bureau of Reclamation conducted independent review of the final
    plans and specifications for the Missouri River raw water intake, the
    regional water treatment plant and the Culbertson to Medicine Lake
    Project. The Agency participated heavily during the construction phases
    of those projects and concurred in all aspects of construction from
    bidding through the completion of construction. The regional water
    treatment plant is under construction, and the Bureau of Reclamation is
    providing sound oversight.
        Cooperative agreements have been developed and executed between the
    Bureau of Reclamation and the tribes and between Bureau of Reclamation
    and Dry Prairie. Those cooperative agreements carefully set out goals,
    standards and responsibilities of the parties for planning, design and
    construction. All plans and specifications are subject to levels of
    review by the Bureau of Reclamation pursuant to the cooperative
    agreements. The sponsors collaborate to undertake activities that
    assure proper oversight and approval by the Bureau of Reclamation. Each
    year the tribes and Dry Prairie, in accordance with the cooperative
    agreements, develop a work plan setting out the planning, design and
    construction activities and the allocation of funding to be utilized on
    each project feature.
        Clearly, the Fort Peck Reservation Rural Water System is well
    supported by the Bureau of Reclamation. Congress authorized the project
    with a plan formulated in full cooperation and collaboration with the
    Bureau of Reclamation, and major project features are under
    construction with oversight by the Agency.

                            SUPPLEMENTAL BACKGROUND

    Local Project Support
        The Fort Peck Tribes have supported the project since 1992 when
    they conceived it and sought means of improving the quality of life in
    the region. The planning was a logical step after successful completion
    of an historic water rights compact with the State of Montana. This
    compact was the national ``ice breaker'' that increased the level of
    confidence by other tribes in Indian water right settlement
    initiatives. The tribes did not seek financial compensation for the
    settlement of their water rights but sought development of meaningful
    water projects as now authorized.
        The 1999 Montana Legislature approved a funding mechanism from its
    Treasure State Endowment Program to finance the non-Federal share of
    project planning and construction. Demonstrating support of Montana for
    the project, there were only three votes against the statutory funding
    mechanism in both the full House and Senate. The 2001 through 2007
    Montana Legislatures have provided all authorizations and
    appropriations necessary for the non-Federal cost share. (The 2009
    legislature is in session and is expected to continue strong project
    support).
        Dry Prairie support is demonstrated by a financial commitment of
    all 14 communities within the service area to participate in the
    project. Rural support is strong, with about 70 percent of area farms
    and ranches intending to participate as evidenced by their intent fees
    of $100 per household.
    Need for Water Quality Improvement
        The Fort Peck Indian Reservation was previously designated as an
    ``Enterprise Community'', underscoring the level of poverty and need
    for economic development in the region. The success of economic
    development within the Reservation will be significantly enhanced by
    the availability of higher quality, safe and more ample municipal,
    rural and industrial water supplies that this regional project will
    bring to the Reservation, made more necessary by persistent drought in
    the region. Outside the Fort Peck Indian Reservation, the Dry Prairie
    area has income levels that are higher than within the Reservation but
    lower than the State average.
        The feature of this project that makes it more cost effective than
    similar projects is its proximity to the Missouri River. The southern
    boundary of the Fort Peck Indian Reservation is formed by the Missouri
    River for a distance of more than 60 miles. Many of the towns in this
    regional project are located 2 to 3 miles from the river, including
    Nashua, Frazer, Oswego, Wolf Point, Poplar, Brockton, Culbertson, and
    Bainville. As shown on the enclosed project map, a transmission system
    outside the Fort Peck Indian Reservation will deliver water 30 to 40
    miles north of the Missouri River. Therefore, the distances from the
    Missouri River to all points in the main transmission system are
    shorter than in other projects of this nature in Reclamation's Great
    Plains Region.

                                     ______

        Prepared Statement of the National Fish and Wildlife Foundation

        Mr. Chairman and members of the subcommittee, thank you for the
    opportunity to submit testimony regarding fiscal year 2010 Department
    of the Interior Appropriations and funding for the National Fish and
    Wildlife Foundation (Foundation). We respectfully request your approval
    of $5 million through the Bureau of Reclamation's Water and Related
    Resources fiscal year 2010 appropriation. This funding request for
    fiscal year 2010 is within the authorized level for the Foundation and
    would allow us to expand our historical partnership with the Bureau of
    Reclamation.
        In 2009, the Foundation is celebrating its 25th Anniversary and a
    remarkable history of bringing private partners together to leverage
    Federal funds to conserve fish, wildlife, plants and their habitats.
    The Foundation is required by law to match each federally-appropriated
    dollar with a minimum of one non-Federal dollar. We consistently exceed
    this requirement by leveraging Federal funds at a 3:1 ratio while
    providing thought leadership and emphasizing accountability, measurable
    results, and sustainable conservation outcomes. Funds appropriated by
    this subcommittee are fully dedicated to project grants and do not
    cover any overhead expenses of the Foundation.
        As of fiscal year 2008, the Foundation had awarded over 10,000
    grants to more than 3,500 national and community-based organizations
    through successful partnerships with the Department of the Interior
    agencies, including the Bureau of Reclamation (BOR), U.S. Fish and
    Wildlife Service (FWS), Bureau of Land Management (BLM). In addition,
    our collaborative inter-agency model has grown to include partnerships
    with the Environmental Protection Agency, National Oceanic and
    Atmospheric Administration, USDA Forest Service, USDA Natural Resources
    Conservation Service, and several other Federal agencies. This
    effective model brings together multiple Federal agencies with local
    government and private organizations to implement conservation
    strategies that directly benefit diverse habitats and a wide range of
    fish and wildlife species.

                           HISTORY OF BOR PARTNERSHIP

        BOR has been an important funding partner with the Foundation since
    1996. This subcommittee provided direct BOR appropriations to the
    Foundation during fiscal year 1996-fiscal year 2003 and we also have a
    long history of working with BOR through discretionary cooperative
    agreements. Some examples of our successful partnership include:
      --Pacific Grassroots Salmonid Initiative.--BOR was a partner with the
            Foundation and NOAA to restore native fish habitat in
            California, Oregon, and Alaska. Community-based grants support
            projects for in-stream habitat restoration, fish passage
            improvements, and barrier removals to benefit salmonids.
      --Bring Back the Natives Program.--BOR participated in a national
            grant program to restore aquatic species back to historic
            habitats with the Foundation, U.S. Fish and Wildlife Service,
            Forest Service and Bureau of Land Management. Bring Back the
            Natives has already benefited more than 120 species, including
            29 listed species such as salmon, desert pupfish, modoc
            suckers, tui and borax chubs and toiyabe spotted frog.
      --Lower Colorado River Multi-Species Conservation Program.--The
            Foundation previously partnered with BOR as part of this
            program to administer funds and coordination of on-the-ground
            conservation activities. As part of the program, the Foundation
            successfully acquired 1,400 acres of Southwestern Willow
            Flycatcher riparian habitat in New Mexico and Arizona.
      --Williamson River Delta.--BOR is currently a partner in the
            Foundation's efforts in the Williamson River Delta of Upper
            Klamath Lake to protect, restore and maintain shoreline
            wetlands critically important for the ESA-listed short-nosed
            and Lost River suckers and to support monitoring efforts for
            fish passage in the basin.

                         FISCAL YEAR 2010 OPPORTUNITIES

        Fiscal year 2010 appropriations through BOR would allow the
    Foundation to build more robust programs for our ongoing efforts and
    forge new and innovative partnerships with BOR that will be required to
    further develop water transaction programs to increase in-stream flows
    for fish, removing fish passage barriers, and improving water quality
    in reservoirs. These strategies are essential to the recovery of many
    important fish species and provide important recreational opportunities
    for the public.
        It is widely known that climate change will endanger some fish and
    wildlife populations and ecosystems more than others. In fiscal year
    2008, the Foundation initiated grant-making through new keystone
    initiatives, which focus on conservation and measurable impact on
    select species of birds, fish and sensitive habitats. With BOR and
    other agency funding in fiscal year 2010, we will accelerate
    implementation of these strategic initiatives, many of which seek to
    address the affects of climate change through wildlife and natural
    resource adaptation. To ensure success in these investments, we are
    incorporating monitoring and evaluation into the entire lifecycle of
    our strategic initiatives in order to identify the highest priority
    areas that will be resilient to climate change to assure long-term
    conservation effectiveness, measure progress, promote adaptive
    management, demonstrate results, and continuously learn from our grant-
    making.
        With our partners, the Foundation has identified several species
    and ecosystems in need of immediate conservation action. In partnership
    with BOR, fiscal year 2010 funds will focus on restoration of in-stream
    flows, imperiled species recovery, and reservoir management.
      --Restoration of In-Stream Flows.--We recognize that climate change
            will greatly exacerbate two existing water supply problems
            which impact wildlife and the public--too little water during
            critical fish migration periods and the seasonality of
            freshwater supplies. The Foundation has successfully
            implemented a water transactions program in the Columbia Basin
            in partnership with the Bonneville Power Administration, local
            water trusts, agencies and willing landowners. Building on this
            success, the Foundation is working proactively with Federal,
            State and local partners to expand voluntary water transaction
            programs to benefit a diversity of wildlife species while
            improving water flows year-round for human use. BOR funding in
            fiscal year 2010 would support voluntary water transaction
            programs in the Klamath Basin of Oregon and California to add
            water storage capability in the watershed and increase
            available flows to meet both fish and irrigation needs. In
            central California, fiscal year 2010 funds would also support
            in-stream flow restoration along the Upper Sacramento River and
            water storage and increased flows in the Sierra Nevada alpine
            wetlands, or wet meadows.
      --Imperiled Species Recovery.--Fiscal year 2010 funding would benefit
            the recovery of multiple fish species in the key watersheds.
            For example, wetland and stream habitat restoration on working
            landscapes in the Upper Klamath Basin, Oregon, will benefit two
            ESA-listed sucker species and native redband trout. In the
            Lower Klamath Basin of northern California, habitat
            restoration, fish passage improvement and a new water
            transactions program would restore flows for Coho salmon,
            Chinook salmon and steelhead trout. In the Upper Colorado River
            Basin, our efforts will focus on the warmwater-coldwater
            interface to improve habitat for Colorado Cutthroat trout,
            native suckers and chubs on both public and private lands.
      --Reservoir Management.--Fiscal year 2010 funding would support
            implementation of a Colorado River native fishes habitat
            restoration program near BOR reservoirs. Working with BOR and
            the U.S. Fish and Wildlife Service, one or two high priority
            reservoirs will be targeted to serve as demonstration projects
            for how reservoir habitat restoration can lead to improved lake
            health, increased wildlife-related recreation opportunities and
            strengthened local economies. In many reservoirs across the
            west, fish habitat has significantly diminished since
            construction of the reservoirs. This is due to loss of habitat
            structure within the reservoir as well as reduced water quality
            upstream of the reservoir. The Foundation will work with BOR
            and other partners to improve upstream habitat and water
            quality for native fish while also improving habitat conditions
            within the reservoir.
        With a fiscal year 2010 BOR appropriation, the Foundation would
    engage non-Federal donors to support these strategic conservation
    initiatives through corporate contributions, legal settlements, and
    direct gifts. As a neutral convener, the Foundation is in a unique
    position to work with the Federal agencies, State and local government,
    corporations, foundations, conservation organizations and others to
    build strategic partnerships to address the most significant threats to
    fish and wildlife populations and their habitats. Currently, the
    Foundation has active partnerships with more than 30 corporations and
    foundations and 17 Federal agencies.
    Efficiency, Performance Measures and Accountability
        In the last couple of years, the Foundation has taken important
    strides to strengthen our performance measures and accountability. For
    example, the Foundation is working with scientists and other experts to
    develop species-specific metrics for each of our keystone initiatives
    that we will use to measure our progress in achieving our conservation
    outcomes. Our grant review and contracting processes have been improved
    to ensure we maximize efficiency while maintaining strict financial and
    evaluation-based requirements. We have enhanced our Web site with
    interactive tools such as webinars and a grants library to enhance the
    transparency of our grant-making, and instituted a new paperless
    application and grant administration system. In 2009, we will continue
    our efforts improve communication between and among our stakeholders
    and streamlining of our grant-making process.
        The Foundation's grant-making involves a thorough internal and
    external review process. Peer reviews involve Federal and State
    agencies, affected industry, non-profit organizations, and academics.
    Grants are also reviewed by the Foundation's issue experts, as well as
    evaluation staff, before being recommended to the Board of Directors
    for approval. In addition, according to our Congressional Charter, the
    Foundation provides a 30-day notification to the Members of Congress
    for the congressional district and State in which a grant will be
    funded, prior to making a funding decision.
        Once again, Mr. Chairman, we greatly appreciate your continued
    support and hope the subcommittee will approve funding for the
    Foundation in fiscal year 2010.
                                     ______

     Prepared Statement of the Northern Colorado Water Conservancy District

        Dear Chairman Dorgan and Senator Bennett, on behalf of the Northern
    Colorado Water Conservancy District, I am requesting your support for
    an appropriation in the President's recommended budget for fiscal year
    2010 of $3,569,000 to the Bureau of Reclamation within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region. The funding designation we seek is as
    follows: $1,219,000 for construction activities for the Upper Colorado
    River Endangered Fish Recovery Program; $1,950,000 for construction
    activities for the San Juan River Basin Recovery Implementation
    Program; and $400,000 for Fish and Wildlife Management and Development
    activities to avoid jeopardy. This funding is authorized by Public Law
    106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Endangered Species Act.
        I appreciate the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

                           Prepared Statement of APS

        Dear Chairman Dorgan and Senator Bennett, we are requesting your
    support for an appropriation in the President's recommended budget for
    fiscal year 2010 of $3,569,000 to the Bureau of Reclamation within the
    budget line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado Region. The funding designation we
    seek is as follows: $1,219,000 for construction activities for the
    Upper Colorado River Endangered Fish Recovery Program; $1,950,000 for
    construction activities for the San Juan River Basin Recovery
    Implementation Program; and $400,000 for Fish and Wildlife Management
    and Development activities to avoid jeopardy. This funding is
    authorized by Public Law 106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Endangered Species Act.
        I appreciate the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

       Prepared Statement of the New Mexico Interstate Stream Commission

        Dear Chairman Dorgan, attached herewith is my statement in support
    of funding for the U.S. Bureau of Reclamation's Colorado River Basin
    salinity control program. I sincerely appreciate your favorable
    consideration of this statement and request that it be made a part of
    the formal hearing record for fiscal year 2010 appropriations for the
    Bureau of Reclamation. Also, I fully support the statement of Jack
    Barnett, Executive Director, Colorado River Basin Salinity Control
    Forum, submitted to you in support of the Bureau of Reclamation's
    Colorado River Basin salinity control program.
                                     ______

       Prepared Statement of the Central Utah Water Conservancy District

        Dear Chairman Dorgan and Senator Bennett, we are requesting your
    support for an appropriation in the President's recommended budget for
    fiscal year 2010 of $3,569,000 to the Bureau of Reclamation within the
    budget line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado Region. The funding designation we
    seek is as follows: $1,219,000 for construction activities for the
    Upper Colorado River Endangered Fish Recovery Program; $1,950,000 for
    construction activities for the San Juan River Basin Recovery
    Implementation Program; and $400,000 for Fish and Wildlife Management
    and Development activities to avoid jeopardy. This funding is
    authorized by Public Law 106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Endangered Species Act.
        I appreciate the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

          Prepared Statement of the Santa Clara Valley Water District

                                    SUMMARY

        This statement urges the subcommittee's support for a fiscal year
    2010 appropriation of $40 million for California Bay-Delta Restoration.

                 STATEMENT OF SUPPORT CALFED BAY-DELTA PROGRAM

        Background.--In an average year, half of Santa Clara County's water
    supply is imported from the San Francisco Bay/Sacramento-San Joaquin
    Delta estuary (Bay-Delta) watersheds through three water projects: The
    State Water Project, the Federal Central Valley Project, and San
    Francisco's Hetch Hetchy Project. In conjunction with locally developed
    water, this water supply supports more than 1.7 million residents in
    Santa Clara County and the most important high-tech center in the
    world. In average to wet years, there is enough water to meet the
    county's long-term needs. In dry years, however, the county could face
    a water supply shortage of as much as 100,000 acre-feet per year, or
    roughly 20 percent of the expected demand. In addition to shortages due
    to hydrologic variations, the county's imported supplies have been
    reduced due to regulatory restrictions placed on the operation of the
    State and Federal water projects.
        There are also water quality problems associated with using Bay-
    Delta water as a drinking water supply. Organic materials and
    pollutants discharged into the Delta, together with salt water mixing
    in from San Francisco Bay, have the potential to create disinfection by
    products that are carcinogenic and pose reproductive health concerns.
        Santa Clara County's imported supplies are also vulnerable to
    extended outages due to catastrophic failures such as major earthquakes
    and flooding.
        Project Synopsis.--The CALFED Bay-Delta Program is an
    unprecedented, cooperative effort among Federal, State, and local
    agencies to restore the Bay-Delta. With input from urban, agricultural,
    environmental, fishing, and business interests, and the general public,
    CALFED has developed a comprehensive, long-term plan to address
    ecosystem and water management issues in the Bay-Delta.
        Restoring the Bay-Delta ecosystem is important not only because of
    its significance as an environmental resource, but also because failing
    to do so will stall efforts to improve water supply reliability and
    water quality for millions of Californians and the State's trillion
    dollar economy and job base.
        The passage of H.R. 2828 (Public Law 108-361) in 2004 reauthorized
    Federal participation in the CALFED Bay-Delta Program and provided $389
    million in new and expanded funding authority for selected projects,
    including the San Luis Reservoir Low Point Improvement Project. The San
    Luis Project is one of six new projects, studies or water management
    actions authorized to receive a share of up to $184 million under the
    conveyance section of the bill. It is critical that Federal funding be
    provided to implement the actions authorized in the bill in the coming
    years.
        Fiscal Year 2009 Funding.--Congress appropriated $40 million to the
    program in fiscal year 2009.
        Fiscal Year 2010 Funding Recommendation.--It is requested that the
    congressional committee support an appropriation of $40 million for
    California Bay-Delta Restoration.
                                     ______

         Prepared Statement of the Colorado River Energy Distributors
                              Association (CREDA)

        Dear Chairman Dorgan and Senator Bennett, the Colorado River Energy
    Distributors Association (CREDA) requests your support for an
    appropriation in the President's recommended budget for fiscal year
    2010 of $3,569,000 to the Bureau of Reclamation within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region. The funding designation is as follows:
    $1,219,000 for construction activities for the Upper Colorado River
    Endangered Fish Recovery Program; $1,950,000 for construction
    activities for the San Juan River Basin Recovery Implementation
    Program; and $400,000 for Fish and Wildlife Management and Development
    activities. This funding is authorized by Public Law 106-392, as
    amended.
        CREDA members serve over 4 million electric consumers in the States
    of Arizona, Colorado, Nevada, Utah, New Mexico and Wyoming. CREDA
    members are the purchasers of the clean, renewable hydropower resources
    of the Federal Colorado River Storage Project (CRSP). CREDA is a
    participant in these cooperative programs. CRSP power revenues are
    continuing to be used to provide ongoing base funding for these
    programs. The programs' objectives are to recover endangered fish
    species while water use and development proceeds in compliance with the
    Endangered Species Act.
        CREDA appreciates the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

             Prepared Statement of the Utah Water Users Association

        Dear Chairman Dorgan and Senator Bennett, we are requesting your
    support for an appropriation in the President's recommended budget for
    fiscal year 2010 of $3,569,000 to the Bureau of Reclamation within the
    budget line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado Region. The funding designation we
    seek is as follows: $1,219,000 for construction activities for the
    Upper Colorado River Endangered Fish Recovery Program; $1,950,000 for
    construction activities for the San Juan River Basin Recovery
    Implementation Program; and $400,000 for Fish and Wildlife Management
    and Development activities to avoid jeopardy. This funding is
    authorized by Public Law 106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Endangered Species Act.
        I appreciate the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

                       Prepared Statement of Denver Water

        Dear Chairman Dorgan and Senator Bennett, we are requesting your
    support for an appropriation in the President's recommended budget for
    fiscal year 2010 of $3,569,000 to the Bureau of Reclamation within the
    budget line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado Region. The funding designation we
    seek is as follows: $1,219,000 for construction activities for the
    Upper Colorado River Endangered Fish Recovery Program; $1,950,000 for
    construction activities for the San Juan River Basin Recovery
    Implementation Program; and $400,000 for Fish and Wildlife Management
    and Development activities to avoid jeopardy. This funding is
    authorized by Public Law 106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Endangered Species Act.
        I appreciate the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

         Prepared Statement of the Grand Valley Water Users Association

        Dear Chairman Dorgan and Senator Bennett, we are requesting your
    support for an appropriation in the President's recommended budget for
    fiscal year 2010 of $3,569,000 to the Bureau of Reclamation within the
    budget line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado Region. The funding designation we
    seek is as follows: $1,219,000 for construction activities for the
    Upper Colorado River Endangered Fish Recovery Program; $1,950,000 for
    construction activities for the San Juan River Basin Recovery
    Implementation Program; and $400,000 for Fish and Wildlife Management
    and Development activities to avoid jeopardy. This funding is
    authorized by Public Law 106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Endangered Species Act.
        I appreciate the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

     Prepared Statement of the Confederated Tribes of the Umatilla Indian
                                  Reservation

        Honorable Chairman Dorgan, Ranking Member Bennett, members of the
    subcommittee, we respectfully request fiscal year 2010 appropriation of
    funds for two priority watershed restoration and agricultural water
    supply protection projects in Oregon and Washington, the Umatilla Basin
    Water Supply Study Project (previously funded under the Umatilla Basin
    Project Phase III, OR) and the Walla Walla General Investigation Stream
    Flow Restoration Feasibility Study (previously funded under the Walla
    Walla River Watershed, OR & WA).
      --For the Umatilla Basin Water Supply Project, Oregon, we request an
            appropriation of $150,000 in the Bureau of Reclamation, Pacific
            Northwest Region, Water and Related Resources budget. This
            request will enable the Bureau to finish the study and brings
            to fruition the project that was initiated by the $450,000
            committed by the Bureau of Reclamation to the project in fiscal
            year 2007, the approximately $488,000 and $342,000 provided by
            the subcommittee for fiscal year 2008 and fiscal year 2009
            respectively.
      --For the Walla Walla River Watershed, Oregon and Washington, we
            request an appropriation of $500,000 in the U.S. Army Corps of
            Engineers, Portland Division, Walla Walla District, General
            Investigations budget, and an additional $270,000 identified
            for the Corps to provide to the Confederated Umatilla Tribes
            through inter-governmental agreement to complete work required
            as project sponsor. This request will allow the district and
            the tribal government as Project Sponsor to move directly into
            Pre-Construction Engineering and Design after completion of
            Feasibility Report in 2010. This project is also known as Walla
            Walla River Basin Feasibility Report/Environmental Impact
            Statement.
        Both the Umatilla Basin Water Supply Project and the Walla Walla
    General Investigation Stream Flow Restoration Feasibility Study are
    ongoing projects and have had administration and/or Congressional line
    item funding in past fiscal years.

               UMATILLA RIVER BASIN, OREGON WATER SUPPLY PROJECT

        By letter dated March 19, 2007, the Office of the Secretary of
    Interior responded favorably to the formal requests of the Oregon
    Congressional delegation and of the Confederated Tribes of the Umatilla
    Indian Reservation (CTUIR), Westland Irrigation District and Oregon
    Governor Theodore Kulongoski to initiate the study of the Umatilla
    Basin water development projects and concurrent settlement of the
    tribe's reserved water rights. Counselor to the Secretary, L. Michael
    Bogert, wrote ``I will ask the Secretary's Indian Water Rights Office
    to appoint an Assessment Team . . .'' and ``I will also ask the Bureau
    of Reclamation to move forward with a concurrent appraisal level study
    of water supply options, including a full Phase III exchange . . . to
    help resolve the tribe's water rights claims.''
        The Bureau of Reclamation provided $450,000 in fiscal year 2007 for
    work on the Umatilla Basin water supply appraisal study. The
    subcommittee subsequently provided approximately $488,000 and $342,000
    for this account in the fiscal year 2008 and fiscal year 2009 Energy
    and Water Appropriations bills. The Bureau is actively developing its
    Umatilla Basin Water Supply Study with these funds and will complete
    the project in 2010 with the requested funding.
        The Umatilla Basin Water Supply Project is authorized by the
    Reclamation Feasibility Studies Act of 1966, 80 Stat. 707, Public Law
    89-561, (Sept. 7, 1966).
        The fiscal year 2010 request of $150,000 will enable the Bureau of
    Reclamation to complete the estimated 2\1/2\ year appraisal level study
    in mid 2010. The detailed appraisal study project will inform the
    concurrent Interior Department Indian Water Rights Assessment Team's
    work product. In 2010, Interior should have identified and estimated
    costs and feasibility of a clear project or suite of projects necessary
    to satisfy water rights of the CTUIR and in the Umatilla River.
        This fiscal year 2010 request follows on the work of the Bureau of
    Reclamation, authorized by the Umatilla Basin Project Act of 1988 (100
    Public Law 557; 102 Stat. 2782 title II), to construct and operate the
    Phase I Exchange with West Extension Irrigation District and the Phase
    II Exchange with Hermiston and Stanfield Irrigation Districts. Heralded
    as one of the most successful stream flow restoration and salmon
    recovery projects in the Columbia River Basin, the Umatilla Basin
    Project resulted in partially restored stream flows in the Umatilla
    River and successful reintroduction of spring Chinook, fall Chinook and
    Coho salmon. After nearly a century of dry river bed in summer months
    and extinction of all salmon stocks, there has been an Indian and non-
    Indian salmon fishery nearly every year in the Umatilla River since the
    project was completed in the mid-1990s.
        Completion of the Water Supply Study and the concurrent Tribal
    Water Rights Assessment is supported and endorsed by the Honorable
    Governor Ted Kulongoski and by local irrigation districts including
    specifically Westland Irrigation District, the Umatilla County
    Commission, and local municipalities including specifically the city of
    Irrigon.

         WALLA WALLA BASIN, OREGON AND WASHINGTON, GI FEASIBILITY STUDY

        In its eighth and final full year of work leading to Study
    completion, the U.S. Army Corps of Engineers' feasibility study will
    complete a detailed analysis of the preferred alternative selected to
    restore stream flows in the Walla Walla River. Drained nearly dry
    during summer months by irrigation in Oregon and Washington, the Walla
    Walla River is within the aboriginal lands of the CTUIR and the
    complete loss of salmon violates the agreement by the United States in
    the Treaty of 1855 to protect these fish.
        Since the study's inception, approximately $4 million of Federal
    funds have either been budgeted or appropriated for completion of the
    Study through fiscal year 2009. The Walla Walla District will complete
    the Feasibility Study Report in fiscal year 2010 and this request for
    $500,000 for the Corps and $270,000 for the tribe will allow the
    District and CTUIR to move directly into initiation of Pre-Construction
    Feasibility and Design phase.
        The Feasibility Study Project is authorized by the Senate Committee
    on Public Works July 27, 1962 (Columbia River and Tributaries), 87th
    Congress, House Document No. 403 and initiated as a result of a
    positive Reconnaissance Report for the Walla Walla River Watershed
    (1997) under a General Investigation study.
        The CTUIR is the formal sponsor of the Corps of Engineers
    Feasibility Study and has provided over $4.0 million in in-kind
    contributions. Additionally, the State of Washington Department of
    Ecology has provided $400,000 to the Feasibility Study. This is the
    first year the CTUIR will request Federal funding, over and above that
    requested for Corps of Engineers work, to enable the tribe's
    continuation as Project Sponsor. Because of the unique status as a
    Federal-recognized Indian tribe with Treaty Rights to the Walla Walla
    Basin, and owing to the fact the CTUIR is the formal sponsor of the
    Project, the Confederated Umatilla Tribes request an additional
    appropriation of $270,000 to support their sponsor-required work of
    real estate transactions and water right permitting from Oregon and
    Washington. This will allow the tribe to initiate this work and will
    necessitate additional and continued 2011 support to fund acquisition
    of real property and other related activities. Prior to addressing this
    unique situation in an upcoming Water Resources Development Act bill,
    CTUIR requests the subcommittee consider this request as a clear
    exception to the standard requirement that non-Federal sponsors provide
    non-Federal funding.
        Support for the completion of the Feasibility Study and moving to
    construction of the project is strong and diverse and includes the
    Honorable Governor of Washington Christine Gregoire, the Honorable
    Governor of Oregon Ted Kulongoski, the Walla Walla Watershed Alliance,
    the Walla Walla Basin Watershed Council, basin irrigation districts,
    local State legislators, local governments and many local and regional
    advocacy groups.

                                   CONCLUSION

        In closing, the CTUIR appreciates the opportunity to provide this
    testimony in support of adding funds for the ongoing Umatilla River
    Basin Water Supply Project, Bureau of Reclamation, and the Walla Walla
    River Basin Watershed Restoration Feasibility Study, Army Corps of
    Engineers. Both projects are critically important to protecting
    existing agricultural economies, completing future water supply
    development and concurrently restoring stream flows and recovering
    threatened salmon and other Columbia River Basin fish stocks.
        Thank you.
                                     ______

      Prepared Statement of the Uncompahgre Valley Water Users Association

        Dear Chairman Dorgan and Senator Bennett, we are requesting your
    support for an appropriation in the President's recommended budget for
    fiscal year 2010 of $3,569,000 to the Bureau of Reclamation within the
    budget line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado Region. The funding designation we
    seek is as follows: $1,219,000 for construction activities for the
    Upper Colorado River Endangered Fish Recovery Program; $1,950,000 for
    construction activities for the San Juan River Basin Recovery
    Implementation Program; and $400,000 for Fish and Wildlife Management
    and Development activities to avoid jeopardy. This funding is
    authorized by Public Law 106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Endangered Species Act.
        I appreciate the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

       Prepared Statement of the Upper Gunnison River Water Conservancy
                                    District

        Dear Chairman Dorgan and Senator Bennett, we are requesting your
    support for an appropriation in the President's recommended budget for
    fiscal year 2010 of $3,569,000 to the Bureau of Reclamation within the
    budget line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado Region. The funding designation we
    seek is as follows: $1,219,000 for construction activities for the
    Upper Colorado River Endangered Fish Recovery Program; $1,950,000 for
    construction activities for the San Juan River Basin Recovery
    Implementation Program; and $400,000 for Fish and Wildlife Management
    and Development activities to avoid jeopardy. This funding is
    authorized by Public Law 106-392, as amended.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of New Mexico, Colorado, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water use and development proceeds in
    compliance with the Endangered Species Act.
        I appreciate the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2010 funding to ensure the
    Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

                              DEPARTMENT OF ENERGY

            Prepared Statement of the Gas Turbine Association (GTA)
        The Gas Turbine Association appreciates the opportunity to provide
    the United States Senate Committee on Appropriations Subcommittee on
    Energy and Water Development with our industry's statement recommending
    fiscal year 2010 funding levels for the Department of Energy.
        GTA recommends that the fiscal year 2010 appropriation for Fossil
    Energy include $45 million for the Advanced Turbines Program to meet
    critical national goals of fuel conservation, fuel flexibility
    (including syngas and hydrogen), greenhouse gas reduction, and criteria
    pollutant reduction. We also recommend that Congress take appropriate
    action to ensure the Office of Energy Efficiency and Renewable Energy,
    Industrial Technologies Program fiscal year 2010 appropriation include
    $10 million, directed towards small gas turbine research, as part of
    the Distributed Energy program to achieve goals similar to those
    referenced above for the Fossil Energy initiative. In both cases a
    public-private partnership is needed to ensure success.
        It is clear that dramatic reductions in greenhouse gas emissions
    are in the national interest. It is also clear that our economy needs
    more electric generation capacity to resume and promote further growth.
    Without new technology, the power generation industry will be hard
    pressed to produce additional electric capacity, while at the same time
    meeting the strict greenhouse gas emissions standards being set by
    States and the Federal Government.
        Federal investment in research and technology development for
    advanced gas turbines that are more versatile, cleaner, and have the
    ability to burn hydrogen-bearing reduced carbon synthetic fuels and
    carbon-neutral alternative fuels is needed to ensure the reliable
    supply of electricity in the next several decades. Domestic coal based
    Integrated Gasification Combined Cycle (IGCC) with carbon capture and
    sequestration is one such approach that would significantly supplement
    available supplies of domestic natural gas to guarantee an adequate
    supply of clean and affordable electric power. Alternative fuel choices
    range from imported LNG, coal bed methane, and coal-derived synthetic
    or process gas to biogas, waste-derived gases and hydrogen. Research is
    needed to improve the efficiency, reduce capital and operating costs,
    and reduce emissions.
    technologies for advanced igcc/h2 gas turbine--reducing the

                       PENALTY FOR CO2 CAPTURE

        At current rates of research and development it is unlikely that
    the Nation will have available the gas turbine technologies to meet the
    needs of FutureGen type power plants. The advancement of these
    technologies must be undertaken by the DOE since there is currently no
    pathway to the development, insertion, and maturation of these
    technologies into the Nation's electric power infrastructure based on
    market forces. Thus, a combined effort by the public and private
    sectors is necessary.
        The turbines and related technologies being developed under the DOE
    FE Advanced Turbines program will directly advance the performance and
    capabilities of future power generation with CO2 capture and
    sequestration. Advances are needed to offset part of the power plant
    efficiency and output reductions associated with CO2
    capture. Program funding is required to cost-share in the technology
    development of advanced hydrogen/syngas combustors and other components
    to realize the DOE goals.
        Several GTA member companies are working cost-share programs with
    the DOE to develop technologies for advanced gas turbine power plants
    with carbon capture. These technologies will: (1) increase plant
    efficiency; (2) increase plant capacities; and (3) allow further
    reductions in combustion emissions of hydrogen rich fuels associated
    with CO2 capture and sequestration. This will help offset
    some of the efficiency and output penalties associated with
    CO2 capture. These programs are funding technology
    advancement at a much more rapid rate than industry can do on their
    own.
        The need for increased levels of Federal cost-share funding is
    immediate. The funding levels in past years for the Advanced Turbines
    program has been inadequate to meet DOE's Advanced Power System goal of
    an IGCC power system with high efficiency (45-50 percent HHV), near-
    zero emissions and competitive capital cost. To meet this goal, the
    researchers must demonstrate a 2 to 3 percentage point improvement in
    combined cycle efficiency above current state-of-the-art Combined Cycle
    turbines in IGCC applications.
        The plan for the IGCC-based FutureGen-type application is to
    develop the flexibility in this same machine with modifications to
    operate on pure hydrogen as the primary energy source while maintaining
    the same levels of performance in terms efficiency and emissions. The
    goal is to develop the fundamental technologies needed for advanced
    hydrogen turbines and to integrate this technology with CO2
    separation, capture, and sequestration into a near-zero emission
    configuration that can provide electricity with less than a 10 percent
    increase in cost over conventional plants by 2012.
        The Advanced Turbines program is also developing oxygen-fired (oxy-
    fuel) turbines and combustors that are expected to achieve efficiencies
    in the 44-46 percent range, with near-100 percent CO2
    capture and near-zero NOX emissions. The development and
    integrated testing of a new combustor, turbine components, advanced
    cooling technology, and materials in oxy-fuel combustors and turbines
    is needed to make these systems commercially viable.
        The knowledge and confidence that generating equipment will operate
    reliably and efficiently on varying fuels is essential for the
    deployment of new technology. Years of continued under funding of the
    Advanced Turbines program has already delayed the completion dates for
    turbine R&D necessary for advanced IGCC, as well as timing for a
    FutureGen-type plant validation.

                          MEGA-WATT SCALE TURBINE R&D

        In the 2005 Enabling Turbine Technologies for High-Hydrogen Fuels
    solicitation, the Office of Fossil Energy included a topic area
    entitled ``Development of Highly Efficient Zero Emission Hydrogen
    Combustion Technology for Mega-Watt Scale Turbines''. Turbine
    manufacturers and combustion system developers responded favorably to
    this topic, but DOE funding constraints did not allow any contract
    awards. The turbine industry recommends a follow-up to this
    solicitation topic that would allow the developed combustion technology
    to be tested in machines at full scale conditions and allow for
    additional combustion technology and combustor development for high-
    hydrogen fuels.
        The turbine industry believes that this technology is highly
    relevant to industrial coal gasification applications including: (1)
    site-hardened black-start capability for integrated gasification
    combined cycle applications (the ability to restart an IGCC power plant
    when the electric grid has collapsed); (2) supplying plant electric
    load fueled on syngas or hydrogen; (3) increasing plant steam cycle
    capacity on hot days when large amounts of additional power are needed;
    and (4) in gas turbines for compression of high-hydrogen fuels for
    pipeline transportation. The development of MW-scale turbines (1-100
    MW) fueled with high-hydrogen fuels will promote the sustainable use of
    coal. In addition, highly efficient aeroderivative megawatt scale
    engines operate under different conditions than their larger
    counterparts and are installed for peaking or distributed generation
    applications. Funding is required to design efficient and low emissions
    combustors that accommodate the new fuels.

       HIGH-EFFICIENCY, LOW CARBON, FUEL FLEXIBLE SMALL GAS TURBINES FOR
                               DISTRIBUTED ENERGY

        The Distributed Energy Program of EERE's Industrial Technologies
    program should include $10 million to initiate small gas turbine
    research and development programs to dramatically increase their fuel
    efficiency (and thus reduce their carbon footprint) and to make them
    fuel flexible. Distributed energy is critical to building a efficient,
    diverse, and robust electric power infrastructure. Specifically, this
    program should set a goal of 42 percent efficiency (on a lower heating
    value basis) for advanced small gas turbines while enhancing their fuel
    flexibility to include dual fuel and alternative fuel utilization.
    These programs should build on the success of the Advanced Micro-
    turbine program of past years to overcome the barriers to insertion of
    Distributed Energy into our Nation's electrical infrastructure and to
    build on potential synergies between advanced small gas turbines and
    the advances in waste heat capture such as combined heat and power
    (CHP) and organic Rankine cycle (ORC).

                  GAS TURBINES REDUCE GREENHOUSE GAS EMISSIONS

        The gas turbine industry's R&D partnership with the Federal
    Government has steadily increased power plant efficiency to the point
    where natural gas fired turbines can reach combined cycle efficiencies
    of 60 percent, and quick-start simple cycle peaking units can reach 46
    percent. The gas turbine's clean exhaust can be used to create hot
    water, steam, or even chilled water. In such combined heat and power
    applications, overall system efficiency levels can reach 60 to 85
    percent LHV. This compares to 40-45 percent for even the most advanced
    thermal steam cycles (most of which are coal fired).

        Gas turbines already play a very significant role in minimizing
    greenhouse gas emissions worldwide. Gas turbines are both more
    efficient and typically burn lower carbon fuels compared to other types
    of combustion-based power generation and mechanical drive applications.
    The Nation needs to reinvigorate the gas turbine/Government partnership
    in order to develop new, low carbon power plant solutions without
    increasing our reliance on natural gas. This can be done by funding
    research to make gas turbines more capable of utilizing hydrogen and
    synthetic fuels as well as increasing the efficiency, durability and
    emissions capability of natural gas fired turbines. If Congress
    provides adequate funding to DOE's turbine R&D efforts, technology
    development and deployment will be accelerated to a pace that will
    allow the United States to achieve its emissions and energy security
    goals.
        The GTA respectfully requests $45 million in fiscal year 2010
    appropriations for the Fossil Energy Advanced Turbines Program, and $10
    million for the Energy Efficiency & Renewable Energy ITP/Distributed
    Energy Program directed towards small turbines research in fiscal year
    2010 to meet critical national goals of fuel conservation, fuel
    flexibility (including syngas and hydrogen), greenhouse gas reduction,
    and criteria pollutant reduction.

                              GTA MEMBER COMPANIES

        Alstom Power; Capstone Turbine Corporation; GE Energy; Florida
    Turbine Technologies; Rolls-Royce; Siemens Energy; Solar Turbines;
    Pratt & Whitney Power Systems; Strategic Power Systems; and VibroMeter.
                                     ______

        Prepared Statement of the Federation of American Societies for
                              Experimental Biology

        On behalf of the Federation of American Societies for Experimental
    Biology (FASEB), I respectfully request an fiscal year 2010
    appropriation for the Department of Energy Office of Science (DOE SC)
    of 8 percent over fiscal year 2009. This increase will provide the
    Office of Science with the ability to sustain support for critical
    research programs that spur scientific innovation, fuel the economy,
    move the Nation towards energy independence and improve human health.
        As a Federation of 22 professional scientific societies, FASEB
    represents nearly 90,000 life scientists, making us the largest
    coalition of biomedical research associations in the Nation. FASEB's
    mission is to advance health and welfare by promoting progress and
    education in biological and biomedical sciences, including the research
    funded by VA, through service to its member societies and collaborative
    advocacy. FASEB enhances the ability of biomedical and life scientists
    to improve--through their research--the health, well-being and
    productivity of all people.
        FASEB is composed of 22 societies with more than 80,000 members,
    making it the largest coalition of biomedical research associations in
    the United States. Our mission is to advance health and welfare by
    promoting progress and education in biological and biomedical sciences,
    including the science supported by DOE SC.

        ``[T]he Office of Science is commit[ed] to invest in some of the
    most exciting and daring research that humankind has ever conceived,
    from explorations into the origins of our universe and the constituents
    of life, to the scientific knowledge that will deliver new, clean, and
    abundant sources of energy to meet world needs for 10 billion people by
    the year 2050.''

        This bold statement from the DOE SC Strategic Plan \1\ highlights
    DOE SC's unique role in serving as a catalyst for discoveries in basic
    energy research and in environmental and life sciences as well as
    computational science. The research programs and facilities at DOE SC
    support further cutting-edge science and technological innovations that
    safeguard our Nation, strengthen our economy, and improve the daily
    lives of the American people.
    ---------------------------------------------------------------------------
        \1\ United State Department of Energy. 2004. Office of Science
    Strategic Plan. http://www.er.doe.gov/about/Strategic_Plan/Feb-2004-
    Strat-Plan-screen-res.pdf.
    ---------------------------------------------------------------------------
        Each year, more than 25,000 researchers from universities, other
    government agencies and private industry use DOE SC's extraordinary
    system of national laboratories and research facilities. DOE's state-
    of-the-art facilities comprise the most advanced research system of its
    kind in the world and permit the agency to support unique and vital
    programs in climate change, geophysics, genomics, materials and
    chemical sciences, and life sciences. The Office of Science's emphasis
    on interdisciplinary scientific research supports and extends the basic
    research that other Federal agencies sponsor, and much of the research
    that non-DOE science agencies fund could not occur in the absence of
    DOE's highly specialized research infrastructure.
        DOE's contribution to research and science extends beyond the
    benefits of its national laboratories. The Office of Science is also a
    principal supporter of graduate students and early career postdoctoral
    researchers at U.S. colleges and universities. Almost 50 percent of DOE
    SC's research funding supports research at over 300 colleges,
    universities and institutes nationwide.

                  DISCOVERIES THAT IMPROVE HEALTH & WELL-BEING

        Scientists whom DOE has supported have uncovered a wealth of basic
    biological knowledge and have produced astounding health technologies.
      --Restoring Function to Patients with Disabilities.--Office of
            Science funding led to the bion microstimulator, a miniature
            rechargeable and implantable neurostimulator that may benefit
            50 million Americans who suffer from debilitating conditions by
            stimulating viable nerves and muscles to prevent muscle
            deterioration and help restore nerve and muscle function. The
            device can address a wide variety of diseases and disorders,
            including incontinence, chronic headaches, peripheral pain,
            angina and epilepsy.
      --Targeted Cancer Therapies.--DOE scientists have developed the
            Cesium-131 Brachytherapy Seed, one of the most significant
            advancements in brachytherapy (short distance treatment
            involving the use of carefully placed, radioactive ``seeds'')
            for cancer treatment in nearly 20 years. In treating prostate
            and other cancers, it delivers a highly targeted therapeutic
            dose of radiation to the tumor quickly and with potentially
            fewer side effects.
        Although research DOE SC has funded has already positively
    influenced our lives and health, opportunities on the horizon are even
    more exciting. For example, the DOE-SC Artificial Retina Project is
    developing an artificial retina that can restore sight in patients who
    are blind; the technology can also help persons who are deaf as well as
    those who have spinal cord injuries, Parkinson's disease and almost any
    other neurological disorder. Additionally, researchers at the Argonne
    National Laboratory and the University of Chicago are engineering an
    ``ice slurry'' to cool organs; the slurry may help save stroke or
    cardiac arrest patients from the destruction of their brain and heart
    cells.

                     CLEANER AND MORE SECURE ENERGY FUTURE

        Fundamental discoveries in basic energy sciences funded by DOE SC
    are already having an impact on the energy we use daily and are
    continuing to pave the way for the next generation of environmentally-
    conscious, sustainable energy sources. As a recent report \2\ on future
    energy needs produced by DOE stated, ``Major new discoveries are
    needed, and these will largely come from basic research programs.''
    ---------------------------------------------------------------------------
        \2\ United States Department of Energy, Basic Energy Sciences
    Advisory Committee. 2003. Basic Research Needs to Assure a Secure
    Energy Future. http://www.sc.doe.gov/bes/reports/files/SEF_rpt.pdf.
    ---------------------------------------------------------------------------
      --Building Better Batteries.--DOE SC discoveries resulted in lithium
            batteries that offer high-energy storage capacity in an
            environmentally benign package. Lithium batteries are widely
            used in both consumer and defense applications, such as
            cellular telephones and notebook computers. Moreover, DOE
            researchers have generated a solid-state, fluoride-based
            battery that is safer than traditional batteries in high-
            temperature applications such as oil, gas and geothermal
            drilling.
      --Hydrogen Technologies.--At the Argonne National Lab, scientists
            have constructed the world's fastest commercially producible
            hydrogen sensor that can be used in hydrogen-powered cars to
            detect unsafe levels of hydrogen. Scientists have also
            developed materials resistant to metal dusting degradation,
            which will be used to make more durable equipment in plants
            that manufacture hydrogen.
        Researchers are also on the brink of developing new technologies to
    meet our most pressing energy needs. In an effort to increase the
    amount of c solar power in the Nation's energy supply, DOE SC is
    investing in research aimed at improving conversion of solar energy to
    both electricity and chemical fuels. Moreover, fundamental research
    awards have been made to institutions nationwide as scientists work to
    overcome key hurdles in hydrogen production, storage and conversion in
    an effort to increase the feasibility of hydrogen fuel.

                   RECOGNIZING THE IMPORTANCE OF DOE RESEARCH

        The passage of the America Creating Opportunities to Meaningfully
    Promote Excellence in Technology, Education and Science (COMPETES) Act
    of 2007 renewed our Nation's commitment to science and technology and
    established a 7 year doubling path for the budget of DOE SC. In 2009,
    generous funding provided in the Omnibus Appropriations Act and the
    American Recovery and Reinvestment Act began to fulfill the commitment
    Congress has made to scientific and technological innovation. In 2010,
    we ask that this support continue, both to protect the investments that
    have been made, and to realize the potential of the scientific
    enterprise. An fiscal year 2010 funding level for DOE SC of 8 percent
    over fiscal year 2009 will allow DOE to greatly enhance its
    groundbreaking research portfolio and permit it to confront current and
    future energy and health challenges. Scientists who have received DOE
    SC funding have made and continue to make extraordinary breakthroughs
    that contribute to the quality of our lives and facilitate advances
    that drive our Nation's innovative technologies.
                                     ______

      Prepared Statement of the Biomass Energy Research Association (BERA)

                                    SUMMARY

        This testimony pertains to fiscal year 2010 appropriations for
    biomass energy research, development, and demonstration (RD&D)
    conducted by the Department of Energy (DOE) Office of Energy Efficiency
    and Renewable Energy (EERE), Biomass Program (OBP). This RD&D is funded
    by the Energy and Water Development bill, under Energy Supply and
    Conservation, Energy Efficiency and Renewable Energy. BERA recommends a
    total appropriation of $400 million in fiscal year 2010 for Biomass and
    Biorefinery Systems R&D. This is an increase of $75 million over the
    U.S. Department of Energy request for fiscal year 2010 for this
    programmatic area. Substantial investments in new technology and
    demonstrations will be needed to meet the RFS goals for advanced
    biofuels. Specific lines items for the DOE biomass RD&D budget are
    below (also see Table 1):
      --$40,000,000 for Feedstock Infrastructure development (regional
            partnerships, harvesting and storage technology, exploration of
            new feedstocks).
      --$60,000,000 for Biochemical Conversion Platform Technology
            (emphasis on cost-effective pretreatment technologies and
            fermentation organisms--both are large contributors to high
            cost of biofuels production from cellulosic materials).
      --$60,000,000 for Thermochemical Conversion Platform Technology
            (conversion of plants, oil crops, energy crops, wood and forest
            resources to oils, long chain hydrocarbons, or other fuels/
            intermediates).
      --$200,000,000 for Utilization of Platform Outputs: Integrated
            Biorefinery Technologies demonstrations. Technology
            demonstrations reduce technical and economic risk and
            accelerate the potential for private investment.
      --$40,000,000 for Utilization of Platform Outputs: Bioproducts
            (chemicals and materials).

                                   BACKGROUND

        On behalf of BERA's members, we would like to thank you, Mr.
    Chairman, for the opportunity to present the recommendations of BERA's
    Board of Directors for the high-priority programs that we strongly urge
    be continued or started. BERA is a non-profit association based in the
    Washington, DC area. It was founded in 1982 by researchers and private
    organizations conducting biomass research. Our objectives are to
    promote education and research on the economic production of energy and
    fuels from biomass, and to serve as a source of information on biomass
    RD&D policies and programs. BERA does not solicit or accept Federal
    funding.

       TABLE 1.--FISCAL YEAR 2010 BIOMASS/BIOREFINERY SYSTEMS R&D, ENERGY
                 SUPPLY & CONSERVATION, DOE/EERE BIOMASS PROGRAM
                            [In millions of dollars]
    ------------------------------------------------------------------------
                 Program Area                 Description of RD&D     Total
    ------------------------------------------------------------------------
    Feedstock Infrastructure.............  Regional feedstock          $40.0
                                            partnerships
                                           Joint development of
                                            storage and harvesting
                                            technology
                                           Plants species amenable
                                            to thermochemical
                                            (e.g., high lignin) and
                                            biochemical (e.g., more
                                            easily processed
                                            lignin) processes
    Biochemical Conversion Platform R&D..  Next generation biofuels/    60.0
                                            processes using a range
                                            of feedstocks
                                           Technologies to reduce
                                            costs of pretreatment
                                           Advanced biological
                                            routes that combine
                                            biological methods with
                                            pretreatment to reduce
                                            enzyme costs
                                            dramatically
                                           Seed funding for
                                            revolutionary new
                                            concepts, including
                                            small businesses and
                                            inventors
    Thermochemical Conversion Platform     Next generation biofuels     60.0
     R&D.                                   and processes that can
                                            use a range of
                                            feedstocks (pyrolysis,
                                            gasification, routes)
                                           Technologies to reduce
                                            costs of pretreatment
                                           Seed funding for
                                            revolutionary new
                                            concepts, including
                                            small businesses and
                                            inventors
    Platform Outputs: Integrated           Direct funding (cost-       200.0
     Biorefineries.                         shared) of biochemical
                                            and thermochemical
                                            conversion technologies
                                           Public awareness and
                                            outreach programs
                                           National center for
                                            infrastructure issues
                                           Underwriting of loan
                                            guarantees
    Platform Outputs: Bioproducts........  Co-production of             40.0
                                            chemicals and materials
                                            from biochemical and
                                            thermochemical output
                                            streams as alternatives
                                            to petroleum-derived
                                            chemicals
                                                                    --------
          TOTAL..........................  ........................    400.0
    ------------------------------------------------------------------------

        There is a growing urgency to diversify our energy supply, develop
    technologies to utilize indigenous and renewable resources, reduce U.S.
    reliance on imported oil, and mitigate the impacts of energy on climate
    and the environment. The benefits will be many--support for economic
    growth, new American jobs, enhanced environmental quality, and fewer
    energy-related contributions to climate change. Economic growth is
    fueled and sustained in large part by the availability of reliable,
    cost-effective energy supplies. The import of oil and other fuels into
    the United States is growing steadily, despite increased volatility in
    supply and prices, especially petroleum and natural gas. This creates
    an economic burden on industry and consumers alike, and adversely
    impacts our quality of life. A diversified, sustainable energy supply
    is critical to meeting our energy challenges and maintaining a healthy
    economy with a competitive edge in global markets. Biomass can
    diversify U.S. energy supply in several ways, and biofuels is only one
    avenue:
      --Biomass is the single renewable resource with the ability to
            directly replace liquid transportation fuels.
      --Biomass can be used as a feedstock to supplement the production of
            chemicals, plastics, and materials now produced from crude oil.
      --Gasification of biomass produces a syngas that can be utilized to
            supplement the natural gas supply, generate electricity, or
            produce fuels and chemicals.
        While biomass will not solve all our energy challenges, it can
    certainly contribute to the diversity of our supply, and do so in a
    sustainable way, while minimizing impacts to the environment or
    climate. The Energy Independence and Security Act (EISA) of 2007
    mandates increased use of alternative fuels, with a substantial portion
    to come from cellulosic biomass. To meet the ambitious EISA goals will
    require aggressive support for RD&D to move technology forward and
    reduce technical and economic risk.
          overall bera recommendations for u.s. doe/eere biomass rd&d
      --Make Investments to Accelerate Development of Next Generation
            Biofuels/Processes [Platforms Research and Development--
            Biochemical and Thermochemical Platform R&D].--Balance funding
            so more is allocated toward next generation biofuels and
            processes that include both biochemical and thermochemical
            routes, including pyrolysis, gasification, and others, and
            hybrid routes; emphasize processes that can use a range of
            biomass types. Include advanced biological routes that better
            integrate simplified combined biological methods with
            pretreatment to reduce enzyme costs dramatically as enzymes
            followed by pretreatment are the major cost items that are
            susceptible to change.
      --Make Investments to Bring Down the Cost of Biomass Pretreatment
            [Platforms Research and Development--Biochemical and
            Thermochemical Platform R&D].--Invest substantial funds to
            bring down the capital and operating costs of pretreatment of
            cellulosic biomass. This is very important and deserves
            emphasis as pretreatment is a major factor in the cost of
            production and also influences the cost of the rest of process.
            It remains a major hurdle for commercialization of new
            processes and achieving economic viability of operating
            biofuels facilities. Developing pretreatment processes that
            integrate better with the entire process are a critical aspect.
      --Underwrite an Unprecedented Number of Loan Guarantees and Directly
            Fund a Wide Range of Demonstrations [Utilization of Platform
            Outputs: Integrated Biorefineries].--These actions will raise
            confidence in private investment during uncertain economic
            times--facilities need to be put in the ground now to make a
            difference in the mid and long term. Technology demonstrations
            reduce technical and economic risk and accelerate the potential
            for private investment. A major concern is that DOE has not
            approved and disbursed a single loan guarantee under the
            innovative technology program established by EPAct 2005.
            However, DOE Secretary Steven Chu indicates he is committed to
            reform to speed up the loan guarantee process. We suggest that
            DOE provide 50 percent of capital for first plants with the
            rest being private funds to compensate for the risk of first
            projects while assuring enough private capital is on the line
            for proper due diligence. This level of guarantee is vital--
            introducing any new fuel in today's petroleum-heavy market is
            extremely challenging. The capital costs for petroleum
            processing are paid off, making it a cash producer, while a
            biofuels facility must cover not only cash costs but make a
            high return on capital to compensate for first time risk. This
            is a heavy lift for first-of-a-kind technology.
      --Set Aside Funding for Demonstration of Revolutionary, but Unproven
            New Concepts [Platforms Research and Development--Biochemical
            and Thermochemical Platform R&D].--Seed funding is needed for
            revolutionary new ideas that show great promise. We must appeal
            to the great American sense of innovation and invention to
            bring ideas to the table that will help solve our energy
            crises. Small, entrepreneurial inventors and businesses should
            be part of this equation. This is an important, but riskier
            proposition, and will take longer to allow for successive
            funding of ideas and demonstrations.
      --Invest More Funds in Development of Cost-effective New Bioproducts
            [Utilization of Platform Outputs: Integrated Biorefineries].--
            Some chemicals could be produced from biomass, reducing our
            dependence on oil-derived chemicals and materials that go into
            a myriad of consumer goods from paint to food to drugs to
            plastics. Positive economic returns (and improved margins for
            integrated biorefineries) could be achieved by production of
            value-added co-products, whether the facility is based on
            thermochemical or biochemical technology. Current funding for
            this area is extremely limited. The challenge is that large
            plants are needed for economies of scale, thereby favoring
            biofuels. Chemicals can improve returns in a fuels biorefinery
            and provide scale advantages, but financing construction of
            projects involving more than one product is risky.
      --Invest in Study of New Non-food, Non-commodity Biomass [Feedstocks
            Infrastructure].--This includes algae, selected perennial
            grasses, wood, and waste (of any kind, industrial,
            construction, food processing, etc); include an understanding
            of the viability of these resources (yields, production issues,
            chemistry, etc) for producing a wide range of fuels (analogs
            for gasoline, diesel, jet fuel, marine fuel, etc). This should
            include developing plants species that are more amenable to
            thermochemical (e.g., high lignin) and biochemical (e.g., low
            lignin, more easily processed lignin) processing.
      --Invest Significant Resources on Outreach to Increase Public
            Awareness [Utilization of Platform Outputs].--The importance of
            public opinion cannot be overstated. Increasing awareness and
            understanding of biofuels and their impacts on our energy
            situation is critical. This includes understanding the positive
            environmental impacts, and dispelling of misperceptions--we
            need to get the truth out there, good and bad--and enable
            consumers to make good choices. Funding should include
            incentives to States to get the word out and educate the
            public--and make this information available where people fuel
            up--at local filling stations and grocery stores, etc.
      --Jointly Fund (With USDA, DOT, EPA) a National Center to Address
            Infrastructure Issues [Utilization of Platform Outputs].--A
            national center for centralized information and technology
            exchange is needed, covering all areas of infrastructure from
            storage and transport of feedstocks to blending, storage and
            distribution of fuels to consumers. This center would
            incorporate a public-private partnership model to encourage
            investment in infrastructure. Infrastructure has not received
            much attention, but could severely impede reaching EISA RFS
            goals.
                                     ______

     Prepared Statement of the State Teachers' Retirement System, State of
                                   California

        Department of Energy--Elk Hills School Lands Fund: $9.7 million for
    fiscal year 2010 installment of Elk Hills compensation.
        Congress should appropriate the funds necessary to fulfill the
    Federal Government's settlement obligation to provide compensation for
    the State of California's interest in the Elk Hills Naval Petroleum
    Reserve.

                                    SUMMARY

        Acting pursuant to congressional mandate, and in order to maximize
    the revenues for the Federal taxpayer from the sale of the Elk Hills
    Naval Petroleum Reserve by removing the cloud of the State of
    California's claims, the Federal Government reached a settlement with
    the State in advance of the sale. The State waived its rights to the
    Reserve in exchange for fair compensation in installments stretched out
    over an extended period of time. The State respectfully requests an
    appropriation of at least $9.7 million in the subcommittee's bill for
    fiscal year 2010, in order to meet the Federal Government's obligations
    to the State under the settlement agreement.

                                   BACKGROUND

        Upon admission to the Union, States beginning with Ohio and those
    westward were granted by Congress certain sections of public land
    located within the State's borders. This was done to compensate these
    States having large amounts of public lands within their borders for
    revenues lost from the inability to tax public lands as well as to
    support public education. Two of the tracts of State school lands
    granted by Congress to California at the time of its admission to the
    Union were located in what later became the Elk Hills Naval Petroleum
    Reserve.
        The State of California applies the revenues from its State school
    lands to assist retired teachers whose pensions have been most
    seriously eroded by inflation. California teachers are ineligible for
    Social Security and often must rely on this State pension as the
    principal source of retirement income. Typically the retirees receiving
    these State school lands revenues are single women more than 75 years
    old whose relatively modest pensions have lost as much as half or more
    of their original value to inflation.

                STATE'S CLAIMS SETTLED, AS CONGRESS HAD DIRECTED

        In the National Defense Authorization Act for Fiscal Year 1996
    (Public Law 104-106) that mandated the sale of the Elk Hills Reserve to
    private industry, Congress reserved 9 percent of the net sales proceeds
    in an escrow fund to provide compensation to California for its claims
    to the State school lands located in the Reserve.
        In addition, in the act Congress directed the Secretary of Energy
    on behalf of the Federal Government to ``offer to settle all claims of
    the State of California . . . in order to provide proper compensation
    for the State's claims.'' (Public Law 104-106,  3415). The Secretary
    was required by Congress to ``base the amount of the offered settlement
    payment from the contingent fund on the fair value for the State's
    claims, including the mineral estate, not to exceed the amount reserved
    in the contingent fund.'' (Id.)
        Over the year that followed enactment of the Defense Authorization
    Act mandating the sale of Elk Hills, the Federal Government and the
    State engaged in vigorous and extended negotiations over a possible
    settlement. Finally, on October 10, 1996 a settlement was reached, and
    a written Settlement Agreement was entered into between the United
    States and the State, signed by the Secretary of Energy and the
    Governor of California, under which the State would receive 9 percent
    of the sales proceeds in annual installments over an extended period.
        The Settlement Agreement is fair to both sides, providing proper
    compensation to the State and its teachers for their State school lands
    and enabling the Federal Government to maximize the sales revenues
    realized for the Federal taxpayer by removing the threat of the State's
    claims in advance of the sale.

       FEDERAL REVENUES MAXIMIZED BY REMOVING CLOUD OF STATE'S CLAIM IN
                              ADVANCE OF THE SALE

        The State entered into a binding waiver of rights against the
    purchaser in advance of the bidding for Elk Hills by private
    purchasers, thereby removing the cloud over title being offered to the
    purchaser, prohibiting the State from enjoining or otherwise
    interfering with the sale, and removing the purchaser's exposure to
    treble damages for conversion under State law. In addition, the State
    waived equitable claims to revenues from production for periods prior
    to the sale. The Reserve thereafter was sold for a winning bid of $3.53
    billion in cash, a sales price that substantially exceeded earlier
    estimates.

       CONGRESS SHOULD APPROPRIATE $9.7 MILLION FOR THE FISCAL YEAR 2010
                     INSTALLMENT OF ELK HILLS COMPENSATION

        The State's 9 percent share of the adjusted Elk Hills sales price
    of $3.53 billion is $317.70 million. To date, Congress has appropriated
    seven installments of $36 million and one installment of $48 million
    that was reduced to $47.52 million by the 1 percent across-the-board
    rescission under the fiscal year 2006 Defense Appropriations Act, for
    total appropriations to date of $299.52 million of Elk Hills
    compensation owed to the State. Accordingly, the Elk Hills School Lands
    Fund should have a positive balance of at least $18.18 million.
        We understand that Department of Energy personnel under the Bush
    administration had proffered four purported grounds for suspending
    further payments of Elk Hills compensation to the State. Each of these
    is a ``red herring''.
        Red Herring No. 1. Finalization of respective equity shares of
    Federal Government and ChevronTexaco as selling co-owners of Elk Hills
    oil field still not completed.--The Bush administration's fiscal year
    2009 budget request stated that ``the timing and levels of any future
    budget request [for Elk Hills compensation] are dependent on the
    schedule and results of the equity finalization process'' between the
    Federal Government and ChevronTexaco to determine the relative
    production over the years from their respective tracts in the Elk Hills
    field. (Fiscal Year 2009 Budget Appendix, at p. 403). But DOE already
    has held back $67 million, including $6.03 million from the State's
    share, to protect the Federal Government's interests in a ``worst case
    scenario'' for this equity process. The State has agreed to a ``hold-
    back'' of that amount to protect the Federal Government's interest.
    This reduces the available balance in the Elk Hills School Lands Fund
    to $12.15 million. In addition, DOE's fiscal year 2009 congressional
    budget request detail stated that the equity determination is in its
    final stages: ``Of the four applicable zones [in Elk Hills], the Dry
    Gas Zone and Carneros Zone are finalized. The Stevens Zone [the largest
    in Elk Hills] is expected to be completed in 2008. A final
    recommendation for the Shallow Zone is pending.'' (p. 142).
    Accordingly, remaining uncertainty in the equity process thus provides
    no basis for withholding further payment of the State's Elk Hills
    compensation.
        Red Herring No. 2. There is no money left in the Elk Hills School
    Lands Fund right now.--The Bush administration's fiscal year 2009
    budget request stated: ``Under the Act [that mandated the sale of Elk
    Hills], 9 percent of the net proceeds were reserved in a contingent
    fund in the Treasury for payment to the States. . . . Under the
    settlement agreement, $300 million has been paid to the State of
    California.'' (Fiscal Year 2009 Budget Appendix, at p. 403). The fiscal
    year 1999 budget request at the time of the sale notes that $324
    million was deposited into the Elk Hills School Lands Fund. (Fiscal
    Year 1999 Budget Appendix, at pp. 378-9). A post-sale adjustment to the
    Elk Hills sales price reduced this amount to $317.7 million.
    Accordingly, after deducting the $300 million in payments to the State
    to date and the $6 million hold-back to protect the Federal
    Government's interests in the ``worst case'' scenario for the equity
    process, the Elk Hills Fund has ample funds available for appropriation
    of a further payment of compensation to the State.
        Red Herring No. 3. No payment can be made to the State because of
    pending litigation between ChevronTexaco and DOE.--DOE has pointed to
    pending litigation brought by ChevronTexaco against DOE in the U.S.
    Court of Federal Claims (Docket No. 04-1365C) as a reason to suspend
    further payments to the State. This litigation alleges DOE personnel
    committed misconduct in the equity finalization process by having
    improper ex parte contacts and having the same DOE staff serve as both
    advocate for DOE's position and advisor preparing the decision
    documents for the decisionmaker. However, the California State Attorney
    General has analyzed this litigation and advised that this litigation
    is a claim for money damages for DOE staff misconduct that has no
    effect on the Federal Government's equity share, and so there is no
    effect on the State's share of compensation. Indeed, under the
    governing agreement between DOE and Chevron, Chevron had waived any
    right to contest the final equity determination in court. Hence this
    litigation provides no basis for withholding the rest of the State's
    compensation.
        Red Herring No. 4. No payment can be made to the State because the
    State's share must be reduced by the equity finalization costs and
    environmental remediation costs and the final amount of such costs is
    not yet known.--The State's share of compensation is properly reduced
    by the ``direct costs of sale'' as required by Congress. Since the sale
    took place over a decade ago, those costs are fixed and known. The
    State has agreed to bear its share of these sales expenses. However,
    DOE is seeking to charge against the State's share two additional
    categories of costs--costs of determining the equity ownership and
    environmental remediation--that constitute ongoing costs of operating
    the oil field, not sales expenses. The California State Attorney
    General advises that these do not properly constitute sales expenses
    chargeable against the State's share.
        More specifically, the Settlement Agreement between the Federal
    Government and the State provides that the Federal Government shall pay
    the State ``9 percent of the proceeds from the sale of the Federal Elk
    Hills Interests that remain after deducting from the sales proceeds the
    costs incurred to conduct such sale.'' This reflects the congressional
    direction that, ``In exchange for relinquishing its claim, the State
    will receive 7 [9 in the final legislation] percent of the gross sales
    proceeds from the sale of the Reserve that remain after the direct
    expenses of the sale are taken into account.'' (House Rept. No. 104-
    131, Defense Authorization Act for fiscal year 1996, Public Law 104-
    106).
        The State has agreed that the $27.13 million incurred for
    appraisals, accounting expenses, reserves report, and brokers'
    commission are appropriate sales expenses. Accordingly, the State's 9
    percent share of these proper sales expenses reduces the available
    balance of the Elk Hills School Lands Fund by $2.44 million to $9.7
    million.
        Costs of conducting the equity adjustment are properly viewed as
    ongoing costs incurred due to the joint operation of the Elk Hills oil
    field by the Federal Government and ChevronTexaco, since the equity
    adjustment already was required under their joint operating agreement
    and related to pre-sale production revenues. Similarly, costs of
    environmental remediation of the Elk Hills field was a cost
    attributable to the prior operation of the field, which created any
    environmental problems that exist. The ongoing operational nature of
    this cost is underscored by the fact that the Federal Government is
    currently engaged in the phased environmental remediation of a Naval
    Petroleum Reserve that it is not selling--NPR-3 (Teapot Dome), as
    evidenced by the fiscal year 2009 budget request.

                                   CONCLUSION

        Therefore, of the current Elk Hills School Lands Fund balance of
    $18.18 million, taking into account the ``hold-back'' for worst case
    scenario under equity finalization and deducting the appropriate direct
    costs of conducting the sale, the State respectfully requests the
    appropriation of at least $9.7 million for Elk Hills compensation in
    the subcommittee's bill for the fiscal year 2010 installment of
    compensation, in order to meet the Federal Government's obligations to
    the State under the Settlement Agreement.
                                     ______

     Prepared Statement of Integrated Building and Construction Solutions
                                 (IBACOS), Inc.

        IBACOS (Integrated Building and Construction Solutions) urges the
    Subcommittee on Energy and Water Development to provide $46 million for
    the Building America Program at the Department of Energy's (DOE) Office
    of Building Technologies in fiscal year 2010 Appropriations under the
    Office of Building Technologies, Residential Building Integration,
    Energy Efficiency and Renewable Energy. We further urge that the
    following language is included to ensure that the competitively
    selected Building America teams are funded at a percentage comparable
    to their historic funding: Of these funds, $35 million shall be
    provided for the research activities of the competitively selected
    Building America research teams, the Building America lead research
    laboratory, and other national laboratories conducting research to
    achieve Building America's specified energy performance targets.
        Residential Buildings currently account for over 20 percent of the
    primary energy consumed by the United States. Each year, more than 1
    million new homes are constructed and over a million are remodeled.
    Significant energy savings can be achieved at minimal increases in
    construction costs provided that a long term and consistent commitment
    is made to work in partnership with the housing industry. DOE's
    Building America Program has developed an industry-driven research
    approach that can reduce the average energy use in new housing by 50
    percent by 2015, providing significant benefits to homeowners in terms
    of reduced utility bills and significant benefits to the U.S. economy
    by maintaining housing as a major source of jobs and economic growth.
    If building in significant energy savings isn't done now, the Nation
    risks using an extravagant amount of energy in the future. In order to
    reduce reliance on foreign energy supplies and to support the
    stabilization of greenhouse gas emissions, we must invest appropriately
    in research in the areas of technology, systems integration, and
    builder processes to upgrade the performance of our housing stock;
    otherwise, we are mortgaging our future.
        Research, development, and outreach activities performed by the
    competitively selected industry Teams in the Building America Program
    are the key element in DOE's strategy to reduce energy consumption in
    residential buildings. The Teams' activities focus on increasing the
    performance of new and existing homes by developing advanced energy
    systems that can be implemented on a production basis, while meeting
    consumer and building performance requirements.
        While the Teams have been working on improving efficiency in
    housing since 1992, with successes being embodied in EPA's Energy Star
    Home program and DOE's Builders Challenge, they are now focused on the
    more difficult goal of creating strategies to achieve Zero Energy Homes
    (ZEH)--homes that produce as much energy as they use on an annual
    basis.

                 A NEW FRONTIER IN RESEARCH--ZERO ENERGY HOMES

        The research needed to develop systems and strategies to achieve
    the long term goal of ZEH is not simply applying lessons learned;
    rather, fundamental research is still required. This R&D, performed by
    the Building America Teams, is truly high-risk, high-payoff research.
        The research required to meet the goal of ZEH is costly and high
    risk:
      --Significant basic research is required to develop and integrate new
            technologies into homes before they are proven effective enough
            to be applied in the field.
      --This research is costly and risky, and not going to be undertaken
            by the industry alone.
      --The life cycle of this research is significantly longer than that
            of comparable industries.
      --The homebuilding industry is extremely fragmented, with
            homebuilders having little ability to drive research, and a
            lower than average financial commitment to investing in
            research.
      --Mechanisms do not currently exist within the homebuilding industry
            to integrate new technologies and strategies effectively.
        The research required to meet the goal of ZEH is also high-payoff
    for the following reasons:
      --Once constructed, homes have a long lifespan, providing the
            opportunity for a durable long term reduction in energy use.
      --Effective strategies to reduce energy use will positively impact
            consumers, as well as the Nation's energy demand.
      --Successful research into integration strategies will allow new,
            high-risk technologies to be adopted more quickly and
            effectively.

    BUILDING AMERICA COMPETITIVE TEAMS--RESEARCH AND IMPLEMENTATION IN THE
                                   REAL WORLD

        The work of the Teams allows industry leadership to drive cost
    effective solutions that move us towards Zero Energy Homes. Building
    America partners have shown that homes with improved efficiency levels
    can have equal or lower purchase prices than conventional homes, in
    addition to much lower energy bills and operating costs, and increased
    building durability as well as occupant safety, health, and comfort. In
    addition to performing the fundamental research needed to advance the
    energy efficiency of our Nation's housing stock, the Building America
    Teams provide recommendations to a broad range of residential
    deployment partners including the EPA's Energy Star Homes Program,
    HUD's Partnership for Advancing Technologies in Housing Program, DOE's
    Builders Challenge, and many industry associations and universities.
    Furthermore, the Teams are perhaps the best resource for DOE to educate
    the builder community on technology and integration breakthroughs. This
    education has been, in part, demonstrated through successful projects,
    where high efficiency housing is being built and bought, such as
    Summerset at Frick Park (Pittsburgh, Pennsylvania); Noisette (North
    Charleston, South Carolina); Civano (Tucson, Arizona); The Landover
    Group (Virginia and Maryland); Forest Glen development in (Carol
    Stream, Illinois); Hunters Point Shipyard (San Francisco, CA);
    Stapleton (Denver, Colorado); Habitat for Humanity (Georgia, Colorado,
    Tennessee, Florida, Michigan, Texas and throughout the United States);
    Summerfield (San Antonio, Texas); Sun City (Las Vegas, Nevada); and
    others throughout the Nation as documented on www.buildingamerica.gov.
    The more than 500 private sector partners who work with the Teams are
    experts in home construction, building products and supply,
    architecture, engineering, community planning, and mortgage lending.
    All construction material and labor costs for homes and communities
    constructed by Building America Teams are provided by DOE's private
    sector partners.
    DOE's Role in the Residential Buildings Research Partnerships
        Catalyzing research in residential construction necessary to
    increase the energy performance, and bringing together industry
    partners to leverage research dollars and expertise.
        Matching advanced product research programs to the system
    integration efforts of the Building America Teams to ensure realistic
    approaches to increasing energy performance.
        Reducing risk and increasing reliability of emerging technologies.
        Providing scientific expertise through the involvement of the
    National Renewable Energy Laboratory (NREL) and other national
    laboratories.
        Sharing critical information about research with several thousand
    associated building industry professionals and leveraging information
    through EPA, HUD, and private sector energy efficiency programs.
    Program Goals
        Reduce energy use in America's housing stock by 50 percent by 2015
    and provide ZEH by the year 2025, integrating renewable energy when and
    where practical.
        Research and develop the systems and strategies necessary to allow
    our Nation to deliver high performance houses in order to increase our
    national energy security.
    Program Status
        Through the competitively selected Teams, Building America works
    closely with America's lead builders, who produce approximately 50
    percent of the Nation's new housing stock. Additionally, the program
    has been tasked with providing the research and development basis for
    the President's Partnership for Housing Energy Efficiency (PHEE). More
    than 30,000 homes have been constructed in 34 States. Increased funding
    is needed to address new program requirements including increased
    energy efficiency goals, increased need for technical support of lead
    builders, contractors, and suppliers for effective participation in the
    program, expansion of applications in existing building stock,
    expansion to multi-family housing stock, and design for integration of
    on-site and renewable power. Specifically, the incorporation of the ZEH
    goals into Building America research and development activities must be
    done in an integrated fashion via the existing competitively selected
    Building America teams, which have begun to include renewable energy
    technologies and on-site energy into some projects. The stated DOE
    goals of the program are unreachable without significant Team funding.
    Recommendation for Fiscal Year 2010 Funding
        Provide $46 million, for the Building America Program at the DOE's
    Office of Building Technologies in fiscal year 2010 appropriations
    (under the Office of Building Technologies, Residential Building
    Integration). Additionally, include language as follows to ensure that
    the competitive teams are funded at a percentage comparable to their
    historic funding:

        ``Of these funds, $35 million shall be provided for the research
    activities of the competitively selected Building America research
    teams, the Building America lead research laboratory, and other
    national laboratories conducting research to achieve Building America's
    specified energy performance targets''.
                                     ______

                        Prepared Statement of GE Energy

        The following testimony is submitted on behalf of GE Energy (GE)
    for the consideration of the subcommittee during its deliberations
    regarding the fiscal year 2010 budget requests for the Department of
    Energy (DOE). Among GE's key recommendations are:
      --Renewable Energy.--GE supports the fiscal year 2010 increases in
            Wind and Solar.
      --Fossil Energy.--(1) Increase Coal funding by $75 million for off-
            the-shelf carbon capture plant designs to accelerate the near-
            term deployment of large-scale carbon capture and
            sequestration; (2) provide $45 million for Advanced Turbines in
            fiscal year 2010 support of advanced IGCC with carbon capture;
            (3) restore funding for water-related R&D activities.
      --Nuclear Energy.--Additional funding is needed for loan guarantees,
            to support new nuclear plant development.

                                RENEWABLE ENERGY

        DOE has played a critical role in the development of renewable
    energy technologies over the past three decades. The fiscal year 2010
    budget request proposes $75 million for Wind and $320 million for
    Solar, representing 36 percent and 83 percent increases, respectively,
    from fiscal year 2009 appropriations. GE welcomes these funding
    increases as critical investments in the transformation of the Nation's
    energy infrastructure. We continue to believe that these appropriations
    must be sustained and increased over time. The American Wind Energy
    Association has recommended that annual Wind appropriations of $200
    million are needed to meet the 20 percent wind by 2030 scenario. The
    fiscal year 2010 budget request is an important step in this direction.
        DOE proposes to utilize the $20 million increase in Wind program
    funds to accelerate offshore wind technology development and improve
    the reliability and cost performance of land-based wind turbines;
    improve grid integration; and support efforts related to workforce
    development, wind-radar mitigation efforts, education, and community
    applications. GE has recommended that the DOE focus its Wind program on
    performance, reliability and grid integration, particularly in areas
    such as blade manufacturing; drivetrain technology; and grid operator
    solutions such as managing variability, ramp rate control, frequency
    regulation, and fault response. We support these new funds as critical
    investments toward achieving the 20 percent wind scenario while
    building U.S. technology and supporting increased U.S. jobs.
        The proposed $145 million increase in Solar program funds includes
    substantial increases in Photovoltaic and Concentrating Solar Power
    R&D, as well as additional investments in systems integration, market
    transformation, and PV manufacturing. GE has recommended that the DOE
    focus its Solar program on improving PV module cost, reliability, and
    efficiency performance, particularly with regard to thin film PV
    technology; and on advanced controls and diagnostics to support the
    grid integration of solar assets. We support these funding increases as
    essential for realizing the DOE's goal of deploying 5-10 gigawatts of
    solar by 2015.

                                 FOSSIL ENERGY

        Commercial Scale CCS Demonstrations.--Demonstration of CCS at
    commercial scale is urgently needed to demonstrate to the public that
    geologic sequestration of CO2 is a safe and environmentally
    acceptable solution for low carbon coal power. The continued use of our
    Nation's abundant coal resources requires proving that integration of
    power plants and sequestration resources can provide competitive and
    reliable electrical generation.
        CCS Deployment.--GE recommends that DOE focus support on the near-
    term deployment of large-scale, utility CCS. In its fiscal year 2010
    budget request, the DOE described the $3.4 billion provided through the
    American Recovery and Reinvestment Act (``ARRA'') as the foundation of
    its clean coal program. However, of the $3.4 billion, the only certain
    funding that will be made available for utility CCS projects is the
    $800 million that will be provided for Round 3 of the Clean Coal Power
    Initiative. Much more is needed. GE is a member of the US Climate
    Action Partnership (USCAP), which recommended in its ``Blueprint for
    Legislative Action'' (January 2009) that a Federal CCS program
    establish at least five (5) gigawatts (GW) of CCS-enabled coal fueled
    facilities. Such a level of CCS deployment is needed to support
    implementation of coal performance standards that are key to achieving
    national greenhouse gas reduction goals. Even if CCPI Round 3 funds can
    be combined with other funding mechanisms for utility projects (e.g.
    EPAct 2005 section 48A Investment Tax Credits, loan guarantees and
    section 48Q CO2 production credits), funding falls well
    short of that necessary to offset the additional capital and several
    years of additional operating costs of 5GW of utility CCS. While
    funding sufficient for 5GWs is not likely without new legislation, DOE
    can provide incentives to help remove barriers and accelerate CCS
    deployment.
        Therefore, GE recommends that DOE fiscal year 2010 Coal funding be
    increased by $75 million (to $478.9 million) to fund the development of
    off-the-shelf Front-End Engineering Designs (FEEDs) for IGCC Greenfield
    plants optimized for CCS for Bituminous and Western coals. IGCC is
    ready for carbon capture now, but only needs the detailed engineering
    to support commercial proposals. Funding of FEEDs should accelerate
    development of commercial CCS projects and reduce the difficulty of
    obtaining approval from State regulators for recovery of project
    development costs. The development of these FEEDs will also deliver
    immediate and foster long-term job creation.
        Geologic Sequestration.--Another significant barrier to the
    deployment of first-mover CCS projects is the uncertainty associated
    with availability of geologic storage. Comprehensive and expensive
    geologic characterization is necessary to ensure that a plant will have
    a sequestration resource with sufficient capacity for a 30-40 year
    life. As with up-front engineering costs, public utility commissions
    are reluctant to approve cost recovery of studies relating to the
    availability of geologic storage, although they are necessary to assure
    project viability. Therefore, GE recommends that DOE fiscal year 2010
    Carbon Sequestration funding be increased by $100 million (to $279.9
    million) for co-funding of detailed geologic characterization to more
    fully validate storage sites for commercial CCS projects that are
    starting development.
        FutureGen.--GE has three recommendations for the structure of the
    FutureGen program that will significantly improve its value in moving
    CCS forward: First, make the successful demonstration of integrated
    carbon capture and sequestration the primary focus of FutureGen.
    Reliable CO2 production is essential to a successful
    sequestration demonstration. Second, FutureGen must demonstrate
    commercially relevant coal power generation with CCS. Carbon capture
    using gasification is widely performed economically and reliably in the
    commercial chemical process industry. The FutureGen project should
    incorporate technology and equipment in a design configuration that is
    representative of commercial practice in order to provide critical
    experience on integration of capture and sequestration at a commercial
    scale. Third, and as is essential to achieving the two foregoing goals,
    we recommend that FutureGen be contracted on a commercial and
    competitive basis for the design and construction of the plant and its
    sequestration facility. FutureGen can draw from existing experience and
    investment and avoid duplication of engineering costs. Carbon capture
    using gasification is widely performed economically and reliably in the
    commercial chemical process industry. GE has invested substantially in
    the development of its standard 630MW IGCC plant and an ancillary
    Carbon IslandTM for carbon capture. A commercial contract
    with its guarantees and warrantees will provide the performance,
    schedule and cost certainty with reliable CO2 supply for
    sequestration that FutureGen needs to achieve its primary goal of
    successful sequestration with reliable power generation.
        Advanced Turbines.--GE recommends that annual funding of $45
    million be provided in fiscal year 2010 to maintain needed progress in
    the Advanced Turbines. The Advanced Turbines program represents the
    Department's high priority research effort focusing on the development
    of enabling technologies for high efficiency hydrogen turbines for
    advanced gasification systems with carbon capture. It is on target to
    enable future advanced IGCC coal fueled power plants to offset much of
    the performance penalties associated with carbon capture while also
    achieving very low NOX emissions. In addition to benefiting
    future coal IGCC applications, the technologies that come out of this
    program will also benefit existing and future natural gas combined
    cycle power plants. Improved efficiency of these applications will mean
    reduced emissions and reduced CO2 for the same power output.
    This improvement would be by either implementing the technology on new
    advanced products or retrofitting the technology into existing gas
    turbines. A one point improvement in efficiency on GE's existing F-
    class fleet would result in 4.4 million tons less of CO2
    emissions per year.
        Water.--Large amounts of water are needed to produce or extract
    energy, and large amounts of energy are needed to treat or transport
    water. This co-dependency is called the Water/Energy Nexus. In order
    for the DOE to achieve its aggressive goals of reducing freshwater
    withdrawals and consumption 50 percent by 2015 and 70 percent by 2020,
    water related R&D funding is needed. GE recommends water-related
    funding under Innovations for Existing Plants be restored and
    significantly increased above the $12 million allocated under the
    fiscal year 2009 budget. Funding for R&D and demo projects including:
    Non-traditional Waters for Cooling Make-up, Water Reuse and Recovery,
    Advanced Cooling Technologies, and Water Treatment and Detection will
    help to ensure DOE's goals are met. GE also recommends $40 million be
    allocated to innovative water reuse technologies and demonstration
    projects in the production of oil and natural gas to further reduce
    environmental impacts and operational costs of upstream energy
    processes. Support is also needed to advance reuse/treatment
    technologies for the conversion of impaired wastewater streams into
    sources of renewable water in areas of water scarcity, reducing the
    need to use energy to transport water over long distances and to
    support electricity generation.

                                 NUCLEAR ENERGY

        Nuclear power plant operation provides baseload energy generation
    with no greenhouse gas emissions. Each operating nuclear plant avoids
    the production of 8 million tons of CO2 annually and in
    total the U.S. fleet of 104 reactors avoids nearly 1 billion tons of
    CO2 annually. GE supports the use of nuclear energy as part
    of a diverse portfolio of power generation technologies and fuels.
        Loan Guarantees and New Plant Development.--Federal investment has
    been instrumental in the licensing and partial development of
    standardized designs for advanced light water reactors and has helped
    form the foundation for a nuclear renaissance through programs such as
    the NP2010 program. In addition to the continuation of existing
    programs, more actions are required to ensure successful
    commercialization of new nuclear technologies. The Energy Policy Act of
    2005 authorized loan guarantees to support advanced nuclear energy
    facilities. Due to the capital-intensive nature of nuclear plant
    deployment, these loan guarantees are key to the ability of utilities
    to attract financing and move forward with this clean, carbon-free
    technology. The current credit crisis in the United States makes it
    increasingly difficult to finance these and other capital-intensive
    projects. The original $18.5 billion in available loan guarantees is
    sufficient to support 2 to 3 new nuclear projects. DOE has already
    received applications for significantly more than that number of
    projects and to have meaningful progress on both climate change and
    energy security certainly more are needed. Based on this level of
    industry demand, the benefit to be derived, and the fact that these
    loan guarantees are self-funded and have no budget impact, GE supports
    an additional $50 billion in authorized loan guarantees through the
    DOE's Loan Guarantee Program for nuclear power facility projects.
        Energy Parks--Research and Development for Commercial Deployment.--
    GE believes that a strong private public partnership should be formed
    to support the Energy Park concept outlined as part of the Office of
    Environmental Management's efforts for footprint reduction of the
    legacy DOE sites. GE believes that the installment of advanced light
    water reactors and research and development to support advanced
    recycling at the existing DOE sites in the Energy Park concept is a
    logical application for these locations. These sites are well
    understood from a permitting aspect and their existing workforce has
    skills that would be directly transferrable to commercial nuclear power
    applications. The Environmental Management office has received funding
    under ARRA. GE supports near term actions as part of this program
    including the community outreach, permitting, siting, design, and
    license application development for new nuclear reactors.
        Non-proliferation and Waste Minimization.--GE supports used nuclear
    fuel recycling as a means to close the fuel cycle, to minimize nuclear
    proliferation risks and provide an alternative to Yucca Mountain. As
    the Nation explores solutions to nuclear waste issues, GE supports and
    seeks an opportunity to participate in the soon to be formed Blue
    Ribbon Waste Panel. The GE team has decades of experience in nuclear
    methods and designs based on U.S. technology that are available to
    close the nuclear fuel cycle. It is in the best interests of national
    security that U.S. technology be used to close the fuel cycle in a
    manner that does not result in separated plutonium.

                            ARPA-E; LOAN GUARANTEES

        GE supports the DOE's budget request for $10 million in program
    direction to support the new ARPA-E program ($400 million appropriated
    through the ARRA) to advance disruptive, high-risk and high-potential
    technologies.
        GE also supports $43 million ($6 billion appropriated through the
    ARRA) for the temporary Loan Guarantee Programs (LGP). Rapid
    implementation of the LGP is central to the recovery of the renewable
    energy industry, and these program operation and personnel funds
    deserve full and immediate support.
                                     ______

        Prepared Statement of the Alliance for Materials Manufacturing
                               Excellence (AMMEX)

        The Alliance for Materials Manufacturing Excellence (AMMEX)
    welcomes this opportunity to provide its input to the subcommittee on
    the proposed budget for fiscal year 2010 for the Industrial
    Technologies Program (ITP) at the Department of Energy. AMMEX is a
    coalition of organizations representing the basic materials
    manufacturing sector (aluminum, chemicals, forest products, glass,
    metal casting, steel) in the U.S. economy along with key stakeholders
    in materials manufacturing, such as the Northeast Midwest Institute,
    the National Association of State Energy Officials and the American
    Council for an Energy-Efficient Economy.
        We are writing to urge Congress to increase the funding to the ITP
    to the level of $150 million and to restore the structure of the
    program to one that emphasizes new process development in individual
    materials industries, including the six historically funded by this
    effort, as opposed to the currently proposed cross-cutting research
    approach. These changes would bring the program into alignment with
    Congress' intent in both section 452 (Energy Intensive Industries
    Program) of the Energy Independence and Security Act of 2007, which was
    signed into law on December 19, 2007, as well as the Energy Efficiency
    and Renewable Energy Act of 2007, which passed the House unanimously on
    October 22, 2007.
        The member organizations of AMMEX have been partners with ITP since
    the inception of the program's cooperative, industry-specific research
    activities. These research activities are a true public-private
    partnership. DOE and materials manufacturers jointly fund cutting-edge
    research that addresses the needs of the Nation and materials
    manufacturers. All projects have the shared goals of reducing energy
    consumption, reducing environmental impact, and increasing the
    competitive advantage of U.S. materials manufacturers.
        Reducing our need for oil imports, developing an economy that is
    sustainable in energy supply, and reducing our environmental impact are
    important national policy goals. There is no more effective way to
    achieve these goals than through energy efficiency. The lowest cost,
    cleanest, and most reliable energy is the energy that is not consumed
    because of improved efficiency. By reducing the energy intensity of
    materials manufacturing and accelerating the delivery of new
    technology, ITP has helped make U.S. materials manufacturers more
    competitive in global markets, preserving and creating good-paying jobs
    in the process. The program is unique because it selects only projects
    with ``dual benefits'': a public benefit such as reduced emissions or
    energy use justifies the Federal funding, and an industry benefit such
    as a more efficient process or improved product justifies the
    industrial funding.
        U.S. materials manufacturing continues to face challenges resulting
    from increased cost and decreased availability of traditional energy
    supply resources. These challenges have stimulated innovation in the
    materials manufacturing sector in order to create significant energy
    improvements and to diversify energy supplies. While the innovations of
    the past have brought materials manufacturing a long way, the sector
    cannot go further without new innovations. To this end, the materials
    manufacturing processes must be transformed; new processes and new
    innovations must be developed which will consume far less energy and
    that will be able to utilize diverse forms of energy.
        To accomplish these goals, the Federal Government and industry will
    need to re-embark upon a joint effort to broaden and accelerate
    inherently high-risk research, development, and deployment of new
    materials manufacturing processes that utilize diverse energy sources.
    This effort will also allow the materials manufacturing sector to
    lessen dependence on natural gas, oil, and conventional electricity
    sources, thus benefiting consumers through contribution to a stable
    energy market.
        Dramatic increases in industrial energy prices and growing global
    competition threaten the vitality and the future of U.S. materials
    manufacturing. Unless this trend is reversed, American manufacturing
    jobs in these key industries will increasingly move overseas.
    Manufacturers have responded to such challenges in the past by applying
    the power of innovation to create new products and processes that
    sustain the foundation of the U.S. economy.
        Our request for funding in fiscal year 2010 for ITP entails two
    parts:
      --An increase to a total program level of $150 million, as authorized
            in the Energy Independence and Security Act of 2007.
      --A re-structuring of the program so as to return to the structure
            that was so successful from 1990 to 2003--a balanced portfolio
            of research from the point of view of research impact; i.e., a
            greater focus on energy intensive industrial processes. For the
            2010 budget, we request that the Industries of the Future
            industry-specific R&D be increased to $30 million. We further
            recommend that in future budgets at least 50 percent of the
            funding go to research into new process development where the
            energy savings potential in industry is highest.
        Figure 1 below is representative of the gains in energy efficiency
    made by materials manufacturers since 1990, when they began partnering
    with ITP.

        This chart shows that materials manufacturing processes have become
    increasingly efficient from 1990 to 2000, and that new process
    developments are required to continue making similar gains in the
    future.
        Between 1990 and 1996 the program consisted largely of ``industry-
    specific'' funding and averaged $100 million annually. There were some
    ``cross-cutting'' projects in this time, but they were a relatively
    small percentage of the total. As the program grew, spending still
    remained focused on industry-specific projects. Figure 2 below shows
    the funding history of the DOE ITP program since 1998.

        Figure Notes:
      --IAC and Distributed Generation funding are subsets of ``Cross
            Cutting RD&D''
      --``Other Funding'' includes management and technical planning and
            support, as well as other funding not listed under ``Industry-
            Specific'' or ``Cross Cutting'' in budget documents. The $50
            million ``Other Funding'' in 2009 is for information and
            communications technology efficiency.
      --2010 AMMEX recommendation includes: $30 million for Industry
            Specific R&D, $65 million for Cross Cutting RD&D (including $8
            million for the IAC program), and $55 million for Distributed
            Generation.
        By 2004, ITP was not only the target of drastic cuts, but remaining
    funds were rebalanced to favor cross-cutting projects over industry-
    specific projects as well. While Figure 1 shows that new process
    developments are needed to improve the energy efficiency of materials
    manufacturing industries, Figure 2 shows that these necessary funding
    levels are not being met. A recent peer review of the program indicated
    that the technology pipeline for R&D projects is now running dry. It is
    imperative to fund these programs now, as it takes time to refill the
    pipeline and achieve additional energy savings.
        AMMEX members that DOE has recently supported have identified their
    top new process development concepts, not listed in order of priority,
    which would be pursued at the funding levels and structure defined
    above:
    Aluminum
      --Improved energy-efficient burners and furnaces for aluminum
            melting.
      --Improved energy efficiency and recovery rates for recycling
            technologies.
    Chemicals
      --Development of alternative feedstocks for the chemical industry to
            reduce dependence on petroleum and natural gas derived
            feedstocks.
      --Nano-manufacturing scale-up methodologies for key unit operations:
            synthesis, separation, purification, stabilization, and
            assembly.
      --Development of low-energy, low-capital membrane or hybrid
            separations technology.
    Glass
      --Submerged Combustion Melter.
      --Waste Heat Recovery and Use as Electrical or Chemical Energy.
      --Increase glass strength (towards theoretical) to reduce weight and
            energy per unit made.
    Forest Products
      --Energy-efficient pulping and papermaking.
      --Eliminating use of fossil fuels in manufacturing.
      --Significantly reducing fresh water consumption in pulp and paper
            mills.
    Metal Casting
      --Net Shaped Manufacturing through Advanced Lost Foam Casting
            technologies.
      --Smart coatings and advanced surface treatments for energy efficient
            tooling technologies.
      --Disruptive approaches for nano-composites for lighter weight cast
            components.
      --High Strength Steels for improved service performance.
    Steel
      --Ironmaking by Molten Oxide Electrolysis.
      --Ironmaking by Flash Smelting using Hydrogen.
      --Demonstration of the Paired Straight Hearth Furnace Process.
        Other industries, such as cement, would benefit from expanded R&D
    as well, but have not been engaged with the Department.
        The United States also faces serious shortages in the science and
    engineering workforce that is needed to keep our Nation's competitive
    edge in world markets through technology innovation and timely
    application. There is a clear need for a reinvigoration of our
    commitment to technology education. Advanced R&D projects are often
    undertaken in conjunction with major American research universities.
    These projects help to expose students to the kind of research
    necessary to serve the future energy efficiency needs of industry.
    Other ITP efforts such as the Industrial Assessment Center program
    complement this R&D funding by helping to train this future workforce.
        Our proposal to the subcommittee is an effort to both rebuild
    America's materials manufacturing industries and revitalize our science
    and engineering institutions. It builds a new public-private
    partnership to support these twin goals, and will ensure that the U.S.
    materials manufacturing industry will remain vital and competitive
    through:
      --Accelerating technology innovation to ensure the future
            competitiveness, resource efficiency, and sustainability of our
            domestic materials manufacturing industry;
      --Building the vital intellectual infrastructure in American
            universities and laboratories that will work in partnership
            with the materials manufacturing industry; and
      --Maintaining a healthy American materials manufacturing base, which
            is vital to our national security.
        On behalf of the AMMEX coalition, we thank you for the opportunity
    to submit this statement. We look forward to continuing to work with
    the subcommittee as you move forward on the fiscal year 2010
    Appropriations legislation for the Department of Energy.
                                     ______

          Prepared Statement of the American Society for Microbiology

        The American Society for Microbiology (ASM) is pleased to submit
    the following testimony on the fiscal year 2010 appropriation for the
    Department of Energy (DOE) science programs. The ASM is the largest
    single life science organization in the world with more than 43,000
    members. The ASM mission is to enhance the science of microbiology, to
    gain a better understanding of life processes, and to promote the
    application of this knowledge for improved health and environmental
    well-being.
        The DOE Office of Science funds basic research in support of the
    DOE's mission of energy security, national security, and environmental
    restoration. Research supported by the Office of Science encompasses
    such diverse fields as materials sciences, chemistry, high energy and
    nuclear physics, plasma science, biology, advanced computation, and
    environmental studies.
        The ASM supports the administration's pledge to substantially
    increase funding for basic science research and scientific user
    facilities and urges Congress to fund the DOE office of science at $5.2
    billion for fiscal year 2010, an 8 percent increase.
        We commend Congress for the substantial and much needed funding for
    the DOE in the American Recovery and Reinvestment Act of 2009 and the
    Omnibus Appropriations Act of 2009. The need remains, however, for a
    steady and reliable increase of fiscal year appropriations to provide
    real growth for DOE science budgets in future years.

                  BIOLOGICAL AND ENVIRONMENTAL RESEARCH (BER)

        Operating within the DOE Office of Science, the BER division
    facilitates the growth of a strong science based platform to continue
    to work with national laboratories, universities and private
    institutions to harness the capabilities of microbial and plant
    systems. A fundamental task of the BER is supporting and providing
    research for the President's National Energy Plan. Research from BER
    contributes to developing cost-effective, renewable energy, increasing
    the Nation's energy security, and works to slow or stop increases in
    atmospheric carbon dioxide among other crucial priorities.
        The ASM urges Congress to support an increase for the BER on par
    with the overall increase in fiscal year 2010 funding for the Office of
    Science.
        Research on microbes contributes advances to critical technologies
    and processes necessary for addressing the Nation's great energy and
    environmental challenges in a number of ways:
      --Carbon Sequestration.--Microbes offer multiple possibilities for
            enhancing carbon sequestration, a process that can reduce
            CO2 accumulation in the atmosphere. These options
            include enhancing plant growth, some of which may be used for
            biofuels, and promoting carbon storage belowground. The latter
            process involves manipulation of microbial communities and
            activities to help stabilize organic carbon in soils.
      --Environmental Remediation.--Microbes play major roles in modifying
            sub-surface environments, where many major pollutants
            accumulate and are subsequently dispersed. Microbial activities
            affect the chemical form and movement of many contaminants. The
            work of various research groups has shown that microbes can be
            manipulated to directly or indirectly provide potential cost-
            effective bioremediation strategies for immobilizing
            contaminants. For instance, two different microbes, Shewanella
            and Geobacter, transform toxic metals such as uranium from a
            soluble form that moves in groundwater, to an insoluble form
            that can then be recovered for decontamination. These and other
            microbes also decontaminate many other metals, radionuclides
            and toxic chemicals.
      --Renewable Energy.--A greater understanding of the process by which
            crude oil is transformed into methane, or natural gas, opens
            the door to recovering clean-burning methane directly from
            deeply buried or in situ oil sands deposits. A recent study
            demonstrated methane production from anaerobic hydrocarbon
            degradation; these findings offer the possibility of
            ``feeding'' specific hydrocarbons to microbes and rapidly
            accelerating their conversion into methane. Additional research
            has shown that hydrogen can be produced from partly degraded
            oil, and used with CO2 to form methane. This paves
            the way for using the microbes to capture this CO2
            as methane, which could then be recycled as fuel in a closed-
            loop energy system.
        Microbial enzymes are also important sources of catalysts for
    conversion of plant biomass, including cellulose and lignins to
    biofuels (e.g., ethanol and butanol). Continued support of basic
    microbiological research is essential for ensuring that the potential
    for biomass as a source of renewable, alternative fuels can be
    realized.

                                 GENOMICS: GTL

        The Genomics.--GTL program supports basic research in plant and
    microbial systems biology and explores microbes and plants at the
    molecular cellular and community levels. The ASM supports an increase
    in funding for GTL in fiscal year 2010 to allow it to continue to
    advance DOE wide missions in environment, climate and energy.
        The GTL goal remains to expand insights about fundamental
    biological processes and a predictive understanding of how living
    systems operate. This understanding, linked with DNA sequences and
    widely available, will catalyze the translation of science to new
    technologies for application in energy and environmental issues.
        The GTL works with the DOE Joint Genome Institute (JGI), one of the
    world's largest and most productive public genome sequencing centers,
    to map genomes of microbes and fungi that degrade biomass or impact
    plant productivity. This relationship has created a vital knowledge
    base within the DOE from which scientists are able to purposefully
    redesign proteins, biochemical pathways, and even entire plants or
    microbes to help solve bioenergy challenges.
        Three GTL Bioenergy Research Centers were established in 2007, the
    Bioenergy Science Center, the Great Lakes Bioenergy Research Center,
    and the JGI. These centers, which are actively working toward making
    the production of biofuels more efficient, less costly, and
    commercially viable; results of ongoing studies are changing the way we
    think about biotechnology, and transforming how we power our Nation.
    The centers are creating knowledge underlying three grand challenges
    faced by biology within the DOE mission: (1) development of the next-
    generation bioenergy crops; (2) discovery and design of enzymes, and
    microbes with novel biomass degrading capabilities; and (3) discovery
    and design of microbes that transform fuel production from biomass.
    Meeting these challenges will benefit all biological research efforts.
        Areas of emphasis in Genomics: GTL include:
        Bioenergy Production.--A broad range of research has been
    undertaken to optimize bioenergy production from a variety of renewable
    sources. Past and ongoing research has made significant progress in a
    number of areas: understanding the details of plant biomass structures
    and how they might be manipulated to improve conversion to biofuels;
    discovery of novel enzymes for improving conversion of biomass to
    biofuels; understanding the details of plant and microbial metabolism
    at a level that promotes controlled synthesis of desired end-products.
        Environmental Remediation.--Research sponsored by Genomics: GTL has
    made major progress in understanding the functions and behavior of
    specific microbes (e.g., Geobacter and Shewanella) and microbial
    communities that play important roles in strategies for remediating a
    wide range of environmental problems, including clean-up of toxic
    wastes and radioactive materials. This work integrates from microbial
    genomes through the functions of microbes in the environment, and
    provides a foundation for altering microbial activities for to solve
    specific problems.
        Carbon Cycling.--Microbes play major roles in the transformation of
    carbon in natural systems. Some of these transformations can promote
    carbon sequestration, while others produce greenhouse gases. Genomics:
    GTL research helps understand how complex microbial communities
    function in nature, and how these communities respond to changes and
    stresses. This information is not only critical for developing
    predictions of microbial responses to climate and other environmental
    changes, but is essential for developing approaches for managing those
    responses to minimize adverse impacts of change.
        The ASM urges Congress to fully support the GTL program with
    increased funding to JGI. In fiscal year 2009, the President's budget
    request included $162.7 million in funding for GTL, but significantly
    cut funding for JGI by $5 million. It is imperative to ensure that
    funding increases are seen for both of these vital programs in fiscal
    year 2010.

                  ENVIRONMENTAL REMEDIATION SCIENCES DIVISION

        The Environmental Remediation Sciences Division (ERSD) within BER
    sponsors and supports fundamental scientific research to understand the
    complex physical, chemical, and biological properties of contaminated
    sites in order to develop new solutions for environmental remediation.
    DOE is responsible for the largest, most complex, and diverse
    collection of environmental remediation challenges in the Nation. ERSD
    supports two major activities: (1) the Environmental Remediation
    Sciences Program (ERSP), which seeks to provide the fundamental
    scientific knowledge needed to address challenging environmental
    problems that impede the remediation of contaminated environmental
    sites; and (2) the Environmental Molecular Sciences Laboratory (EMSL),
    which is a national scientific user facility that provides integrated
    experimental and computational resources for discovery and
    technological innovation in the environmental molecular sciences to
    support the needs of DOE and the Nation.
        DOE's remediation challenges occur in the field where highly
    interactive natural processes acting over a broad range of scales
    control the fate and transport of contaminants. The ERSD goal is to
    help provide the basis for development of innovative remediation
    measures to support decisionmaking critical to long-term stewardship.
    Of the 144 sites where DOE has remediation, waste management, or
    nuclear materials and facility stabilization responsibilities, nearly
    100 have soils, sediments, or groundwater contaminated with
    radionuclides, metals, or organic materials.
        The ASM urges Congress to fully support ERSD, which will help
    support DOE's goal to ``provide sufficient scientific understanding
    such that DOE sites would be able to incorporate physical, chemical and
    biological processes into decisionmaking for environmental remediation
    and long-term stewardship.''

                               ENERGY BIOSCIENCES

        The ASM supports increased funding for the Energy Biosciences
    program within the Basic Energy Sciences Division of Chemical Sciences,
    Geosciences, and Biosciences. The Energy Biosciences (EB) program
    within the Basic Energy Sciences (BES) division supports fundamental
    research to promote the development of future energy-related
    technologies. There is a specific emphasis in research on plant and
    non-medical microbial energy transduction systems. The EB program
    provides a fundamental understanding of the complex processes that
    convert and store energy in living systems and impacts numerous DOE
    interests, enhanced biofuel production strategies, next generation
    energy conversion/storage devices, and efficient and environmentally-
    friendly catalyst development in particular.
        In fiscal year 2009, EB was divided into two separate programs:
        Photosynthetic Systems.--This program is focused on fundamental
    research to elucidate the specific mechanisms by which plants and
    microbes convert solar energy into chemically-stored forms of energy.
    Results from this new program will create a foundation for the
    development of enhanced biological and engineered systems to harvest
    solar energy, thus contributing to the Nation's goal of energy
    independence.
        Physical Biosciences.--This program combines tools and approaches
    from the physical sciences with the disciplines of molecular biology
    and biochemistry to create new understandings of the detailed
    mechanisms for energy storage and use in plants and microbes. Results
    for this new program will promote the development of improved systems
    for harvesting energy in multiple forms and enhancing their use for
    human needs.

                             WORKFORCE DEVELOPMENT

        Scientific research and subsequent discovery is vital for the
    Nation to remain competitive in the global economy and ensuring support
    for a well trained workforce of teachers and scientists at all levels,
    is imperative. The ASM supports increased funding for Workforce
    Development for Teachers and Scientists within the DOE Office of
    Science which funds undergraduate research internships, graduate and
    faculty fellowships, pre-college activities, laboratory equipment
    programs, and teacher programs.

                                   CONCLUSION

        The ASM supports increased funding for the DOE Office of Science in
    fiscal year 2010, and urges Congress to provide adequate funding for
    the BER, ERSD, and Genomics: GTL, and the JGI, which are essential to
    DOE's mission. The DOE Office of Science programs enhance United States
    competitiveness through fundamental research and advanced scientific
    breakthroughs that revolutionize the Nation's approach to challenging
    energy and environment challenges.
        The ASM appreciates the opportunity to provide written testimony
    and would be pleased to assist the subcommittee as it considers the
    fiscal year 2010 appropriation for the DOE.
                                     ______

     Prepared Statement of the American Association of Petroleum Geologists

        To the Chair and members of the subcommittee, thank you for this
    opportunity to provide testimony on the importance and need for strong
    Federal R&D efforts in the fields of oil and natural gas, coal, and
    geothermal technologies. These activities reside in the U.S. Department
    of Energy's fossil energy program (oil, natural gas, coal) and energy
    efficiency and renewable energy program (geothermal). They are an
    essential investment in this Nation's energy security.
        The American Association of Petroleum Geologists (AAPG) is the
    world's largest scientific and professional geological association. The
    purpose of AAPG is to advance the science of geology, foster scientific
    research, and promote technology. AAPG has nearly 34,000 members around
    the world, with roughly two-thirds living and working in the United
    States. These are the professional geoscientists in industry,
    government, and academia who practice, regulate, and teach the science
    and process of finding and producing energy resources from the Earth.
        AAPG strives to increase public awareness of the crucial role that
    geosciences, and particularly petroleum geology play in energy security
    and our society.
        Our members have a big job. Fossil fuels supply 87 percent of the
    world's total energy needs, down only 4 percent in the past quarter
    century. Transportation represents about 30 percent of end use demand
    and is dominated by liquid fuels derived from oil. Heating is another
    30 percent and dominated by oil and natural gas. Electricity represents
    the remaining 40 percent with a broadening portfolio of fuel sources.
    Coal, nuclear, and natural gas currently dominate electricity
    production, but alternatives like wind are growing rapidly. However,
    because electricity demand is also growing, alternatives remain a small
    fraction of total production.
        Today's energy debate is often framed as a choice between fossil
    fuels or alternative (non-fossil) fuels, or between fossil fuels and
    the environment, but these are red herrings. Sustaining a healthy U.S.
    and global economy, and thus enabling substantial investment in our
    environment, requires a stable and continuous supply of fossil fuels
    while simultaneously developing and expanding alternative and new
    fuels. This is the bridge to our energy future. We need both, and the
    process of building this bridge will take 25 to 40 years, perhaps
    longer. Our Nation's energy policies and investments must reflect this
    reality.
        For example, President Obama's fiscal year 2010 budget includes the
    rollback of a series of tax provisions currently available to the oil
    and gas industry, which is dominated today by the U.S. independent
    producer. It also proposes assessing new fees and taxes on oil and
    natural gas producers, and repealing the ultra-deepwater and
    unconventional research programs.
        Compounded by a weak economy and limited access to capital, these
    proposed policies on top of an already heavily taxed industry would
    have a chilling effect on oil and natural gas drilling, production, and
    energy investment in this country, cost many jobs, and directly
    undermine U.S. energy security.
        The United States tried this experiment from 1980-1988 with the
    windfall profits tax which, compounded with the drop in price of oil in
    the 1980's, had a disastrous effect on drilling, industry employment
    and U.S. energy production for nearly two decades to follow. We face a
    very similar price situation now and cannot afford to repeat an
    experiment that has already been tried and failed.
        These either/or policy choices fail to recognize that as we bridge
    to an alternative energy future, we must preserve and even strengthen
    the fossil energy foundation underlying it. Research and development
    investments are critical to developing alternative and new fuel
    sources, but are also needed in fossil energy to develop the science
    and technology to ensure their future availability.

                   OIL AND NATURAL GAS TECHNOLOGIES PROGRAMS

        The oil and natural gas technology research programs at DOE have
    received grossly inadequate appropriations for many years. In fact, in
    fiscal year 2009 Federal oil and natural gas R&D represented a
    miniscule proportion of total energy R&D expenditures, while,
    ironically, oil and natural gas combined contribute 65 percent to our
    Nation's energy portfolio.
        President Obama's fiscal year 2010 budget request continues this
    ill-advised pattern by proposing to eliminate DOE's petroleum-oil
    technologies program, funded at $5 million in fiscal year 2009, and
    increasing by $5 million the natural gas technologies program (for a
    total program of $25 million) to study natural gas hydrates.
        Instead, these programs should be increased substantially to ensure
    the technology will be available to find, develop, and produce these
    natural resources.
        Criticisms of these research programs are frequently couched in
    terms of ``corporate welfare'' or a notion that the private sector
    should support all oil and natural gas research on its own. But these
    charges reveal a fundamental misunderstanding of several important
    trends:
      --The transition to non-fossil fuel alternative energies will take
            much longer than a few decades. Alternatives are currently more
            expensive, less reliable and simply cannot meet the scale of
            energy demand. To try to force the United States on a different
            course than the rest of the world, at a cost of literally
            trillions of dollars, will disadvantage the United States at a
            minimum and worse further hurt the U.S. economy.
      --Increasingly, domestic oil and natural gas production is shifting
            to non-traditional (unconventional) resources, such as the
            Barnett Shale in Texas or the Bakken formation in the Williston
            basin. These resources are different from the conventional
            resources of the past and hold great promise, but realizing
            that potential requires significant R&D and technology
            development. Each resource has unique challenges and if the
            United States is to leverage their global potential it must
            invest accordingly and substantially.
      --Over the past decade the United States has added substantial
            natural gas reserves with a net increase on the order of 15
            trillion cubic feet (TCF) in the past 3 years owing to drilling
            and expansion of shale gas. Proven reserves of dry natural gas,
            including Prudhoe Bay, are about 300 TCF. Natural gas resource
            estimates are 6-7 times the proven reserves. U.S. domestic
            production of dry natural gas in 2008 was 20.6 TCF. Natural gas
            is the largest source of domestically produced energy, slightly
            greater than coal, substantially greater than oil, nuclear, and
            all other sources. With the proper incentives, and combined
            with a commitment to LNG, natural gas could support all of the
            demand growth in power generation needed for several decades.
            Such a shift in the fossil fuel mix would have a very positive
            impact on reducing CO2 emissions growth.
      --The U.S. oil and gas industry is in decline. Many of the top public
            companies that built the U.S. energy advantage no longer exist.
            Such names as Mobil, Amoco, Texaco, Phillips, Unocal, Arco,
            Kerr McGee and others are gone as the result of mergers and
            acquisitions. This decline has not stopped. All combined public
            companies control less than 10 percent of the world's oil and
            natural gas reserves; the remainder is controlled by national
            oil companies (NOCs), many of them OPEC nations. These NOCs are
            now leasing up resources globally and will become the
            international oil companies of the future.
      --Domestic oil and natural gas resources are increasingly developed
            by independent producers, ranging from individuals to large
            companies. They do not have the capacity or resources to
            conduct independent research. They have, however, been willing
            and able to quickly adopt and commercialize new technologies
            when appropriate technology transfer occurs.
      --Federal R&D has historically provided support for the Nation's
            universities and colleges, which have proven to be a rich
            source of technological innovation. But as Federal support for
            oil and natural gas technologies has waned, so has the ability
            to conduct this type of research and train the next generation
            of U.S. scientists and engineers. This trend is particularly
            worrisome, because developing nations are investing
            significantly in fossil energy research and development and
            U.S. universities are now heavily enrolled by non U.S.
            students.
        Given the important role that oil and particularly natural gas
    currently play in our energy portfolio, we must rebuild and expand the
    Nation's Federal R&D and training capacity for oil and natural gas
    through a partnership of government, academia, and industry. These and
    other trends demonstrate the need for a robust Federal oil and natural
    gas program, one that is funded on the scale of coal, nuclear and
    alternatives.
        We request the subcommittee on Energy and Water Development and
    Related Agencies appropriate $500 million for oil and natural gas
    technology programs to be administered by the Department of Energy's
    Office of Fossil Energy to support research projects that target
    increased production of domestic oil and natural gas resources.

                                  COAL PROGRAM

        The Nation's coal resource is vitally important to U.S. energy
    security. AAPG supports significant research and development funding
    for coal, including clean coal technologies such as carbon capture and
    sequestration. We support the funding provided in the American Recovery
    and Reinvestment Act of 2009 for coal research, and encourage Congress
    to sustain this commitment in its fiscal year 2010 appropriations by
    funding at fiscal year 2009 levels or higher.
        Again, these investments must be balanced. In evaluating the DOE
    coal program, I urge you to review the findings of the National
    Academy's report entitled Coal: Research and Development to Support
    National Energy Policy, released in June 2007. The study finds that
    while there are significant uncertainties in U.S. coal reserve and
    resource estimates, there is sufficient coal at current consumption to
    last for more than 100 years.
        However, there is a real need for more ``upstream'' coal research
    to increase our understanding of the Nation's resource base. They
    observe that currently, over 90 percent of Federal R&D spending for
    coal is on the ``downstream'' side, focused on utilization, carbon
    capture and sequestration, and transport and transmission. Only 10
    percent goes to resource and reserve assessment, mining and processing,
    environment/reclamation, and safety and health.
        AAPG supports the $3.4 billion for coal R&D provided in the
    American Reinvestment and Recovery Act of 2009, and supports President
    Obama's fiscal year 2010 request of $404 million.

                     GEOTHERMAL ENERGY TECHNOLOGIES PROGRAM

        Geothermal energy is an important alternative energy resource that
    provides baseload power to the Nation's electrical grid. Significant
    expansion of geothermal power production may be possible through the
    development of enhanced or engineered geothermal systems, but
    developing and proving these technologies will require R&D investment.
        AAPG supports the $400 million for geothermal energy R&D and
    deployment in the American Reinvestment and Recovery Act of 2009. AAPG
    supports President Obama's fiscal year 2010 request for $50 million for
    this program, and encourages Congress to appropriate at this level.

                                    SUMMARY

        Thank you for the opportunity to present this testimony to the
    subcommittee. Building a bridge to our energy future requires
    significant investment in new and alternative energy and fuel sources,
    but it also requires significant R&D investment in fossil fuels, the
    foundation of our global energy system, to ensure an orderly
    transition.
                                     ______

          Prepared Statement of the National Mining Association (NMA)

                              NMA RECOMMENDATIONS

    Department of Energy--Office of Fossil Energy
        Background.--NMA is disappointed that the U.S. Department of Energy
    (DOE) fiscal year 2010 request severely reduced the overall fossil
    energy budget, with steep declines in funding for coal programs. While
    we recognize that the economic stimulus package enacted earlier this
    year included demonstration project and Clean Coal Power Initiative
    funding, we do not believe that such funding justifies the 20 percent
    for all fossil energy programs including in the fiscal year 2010 budget
    request. A cut of this magnitude will compromise advances in clean coal
    and carbon capture and sequestration efforts.
                Office of Fossil Energy
        NMA fully supports and urges maximum funding for carbon capture and
    storage (CCS) projects that avoid, reduce or store air pollutants and
    greenhouse gases while contributing long-term economic growth and
    international competitiveness. Substantial Federal funding for
    continued research, development and demonstration of CCS technologies
    will be required before CCS can be applied to large-scale commercial
    power plants. The construction and operation of near-zero emission and
    low carbon projects, such as the proposed FutureGen project in Mattoon,
    Ill., are indispensable to demonstrate that the technology necessary to
    meet domestic energy demands of the 21st century are available on a
    commercial scale. NMA strongly supports the recent agreement between
    the DOE and the FutureGen Alliance to proceed with a reconfigured
    carbon capture and storage energy facility at Mattoon, Ill. We support
    the use of $1.073 billion from the American Recovery and Reinvestment
    Act for use in this endeavor and look forward to working with the
    Alliance and DOE to further advance CCS technologies.
        Funding for basic research and development of new, innovative clean
    coal technologies is necessary to continue the progress made over the
    last 35 years. Regulated emissions from coal-based electricity
    generation have decreased by nearly 40 percent since the 1970s while
    the use of coal has tripled. Well funded basic coal research by DOE and
    clean coal technology demonstrations undertaken by DOE-private sector
    partnerships will continue this significant progress in energy
    production and environmental improvement. Technological advancements
    achieved in the base coal research and demonstration programs such as
    gasification, advanced turbines and carbon sequestration provide the
    component technologies that will ultimately be integrated into the
    FutureGen project as recently reconfigured. NMA supports funding
    several of these programs at levels higher than the President's
    request, specifically $80 million for IGCC/gasification (DOE's
    requested amount: $55 million), $45 million for advanced combustion
    (DOE's request does not include direct funding) and $45 million for
    advanced turbines (DOE's request: $31 million). We are, however,
    pleased that DOE provides nearly $180 million for the Carbon
    Sequestration Research & Development program and Carbon Sequestration
    Injection Tests combined. We hope that DOE will work with industry to
    identify specific programmatic activities and funding for these
    programs. The increase in funding for these and other programs will
    ensure the FutureGen project meets the intended goals outlined in DOE's
    2004 report to Congress, ``FutureGen, Integrated Sequestration and
    Hydrogen Research Initiative--Energy Independence through Carbon
    Sequestration and Hydrogen from Coal.''
        In addition, NMA recommends $3 million of funding for the Center
    for Advanced Separation Technologies (CAST), which is a consortium of
    seven universities lead by Virginia Tech. CAST has developed many
    advanced technologies that are used in industry to produce cleaner
    fuels in an environmentally acceptable manner, with some having cross-
    cutting applications in the minerals industry. Further development of
    advanced separation technologies will help encourage developing
    countries, such as China and India, to deploy affordable clean coal
    technologies and reduce CO2 emissions. Research in Advanced
    Separations is mandated by the 2005 Energy Policy Act, section 962.
    U.S. Army Corps of Engineers--Regulatory and Civil Works Programs
        Background.--The U.S. Army Corps of Engineers' (Corps) Regulatory
    Branch plays a key role in the U.S. economy through the Corps annual
    authorizations of approximately $200 billion of economic activity
    through its regulatory program. NMA recommends that a portion of the
    Corps' regulatory program funding be used to develop a more efficient
    process for expediting permit decisions associated with surface coal
    mining operations. In addition, NMA supports the inclusion of language
    directing the Corps to dedicate sufficient personnel and financial
    resources needed to support an efficient permit review process.
                Regulatory Program
        NMA supports increased funding for administering the Corps' Clean
    Water Act (CWA) section 404 permit program and for devising an
    efficient permitting program for authorizing surface coal mining
    permits.
                Civil Works Programs
        NMA opposes the Corps' proposed concept of a new inland waterways
    ``lockage fee/tax,'' which would replace the current diesel fuel tax,
    to fund improvements to the Nation's inland waterways system. A lockage
    tax would more than double the taxes paid by the towing industry. The
    coal industry ships approximately 185 million short tons of coal
    annually on the inland waterways systems, therefore the cost of a new
    tax will ultimately be borne by the consumers of coal-fueled
    electricity. NMA opposes such a tax increase and urges Congress to
    reject this proposal and maintain the current diesel fuel tax.
                                     ______

           Prepared Statement of the American Wind Energy Association

                                  INTRODUCTION

        America's wind industry enjoyed a record year of growth last year,
    deploying over 8,500 megawatts (MW) nationwide, which amounted to more
    than 40 percent of the country's new electricity generating capacity.
    Although wind is commercially deployable today, increased research,
    development, and deployment (RD&D) funding could significantly reduce
    its overall cost, improve reliability, and help keep America's domestic
    wind industry competitive with other electric generation sources and
    the wind industries in other countries.
        To meet these goals, the American Wind Energy Association (AWEA)
    requests that the subcommittee provide $105 million for the Department
    of Energy's (DOE) Wind Energy Program for fiscal year 2010, an increase
    of $30 million over the President's budget request. AWEA also requests
    that the subcommittee provide the DOE Office of Electricity Delivery
    and Energy Reliability (OE) with the $208 million included in the
    President's budget request. The President's budget request for OE
    includes approximately $73 million for transmission development and
    grid integration that could directly benefit wind deployment, including
    $20 million specifically for ``transmission reliability and renewable
    integration.''

                  IMPORTANCE AND BENEFITS OF WIND ENERGY RD&D

        The DOE Wind Program has provided essential help to the wind
    industry over the years by supporting technology development and
    assisting in market acceptance of wind. The job is not done, however.
    Wind power is still constrained by difficulties in market acceptance
    and needed improvements in cost, performance, and reliability.
        As wind energy meets more of our energy needs, it is crucial to
    increase Federal funding to lower capital costs and improve turbine
    reliability. DOE's 20 percent Wind Energy by 2030 report assumes that
    capital costs decrease by 10 percent and that turbine efficiency
    increases by 15 percent to reach the goal of providing 20 percent of
    our Nation's electricity from wind by 2030. The need for continued
    Federal investment in wind RD&D is made clear in the report when DOE
    states, ``In a functional sense, wind turbines now stand roughly where
    the U.S. automotive fleet stood in 1940.\1\''
    ---------------------------------------------------------------------------
        \1\ U.S. Department of Energy, ``20% Wind Energy by 2030'' (July
    2008), http://www.20percentwind.org/20p.aspx?page=Report.
    ---------------------------------------------------------------------------
        Meeting the 20 percent goal by 2030 would provide a host of
    benefits nationwide, including:
      --Supporting 500,000 jobs, generating over $1 trillion in economic
            impact by 2030;
      --Reducing natural gas demand by approximately 7 billion cubic feet/
            day, nearly half of the current consumption in the electric
            sector;
      --Decreasing natural gas prices by approximately 12 percent, saving
            consumers approximately $128 billion through 2030;
      --Avoiding 825 million tons of carbon dioxide emissions in the
            electric sector in 2030, equivalent to 25 percent of expected
            electric sector emissions; and
      --Reducing cumulative water consumption in the electric sector by 17
            percent in 2030 (one-third of which would come from the arid
            West).

                     EXPLANATION OF APPROPRIATIONS REQUEST

        Last year, as part of an AWEA Research and Development (R&D)
    Committee effort, a team of over 80 AWEA members and advisors from
    industry, government, and academic institutions met to determine how
    much funding would be needed to meet the goal of providing 20 percent
    of our Nation's electricity from wind energy by 2030. Participants
    determined that $217 million in annual Federal funding, combined with a
    $224 million annual industry/State cost share, would be necessary to
    support the research and development and related programs needed to
    meet that goal. The group determined that $201 million should be
    directed to DOE, with an additional $15.5 million for the Department of
    Labor (DOL) for workforce development.
        AWEA greatly appreciates DOE's designation of funding from the
    American Recovery and Reinvestment Act (ARRA) for wind energy RD&D and
    transmission and systems integration. AWEA is also grateful for the
    increases for the DOE Wind Program and OE transmission activities in
    the President's fiscal year 2010 budget. The combined funding will
    finance a number of key wind industry priorities to help overcome the
    challenges to meet the 20 percent by 2030 vision. However, neither the
    ARRA nor the President's budget appears to fully address a number of
    key wind energy challenges.
        Technology R&D funding through the ARRA and the President's budget
    provides a much needed boost to bring down the cost of wind energy and
    improve wind turbine efficiency. However, more funding is needed to
    address issues related to wind turbine technology, siting and public
    education, wind resource modeling and wind power plant efficiency
    assessment. In April, Secretary Chu announced $93 million from the ARRA
    for wind energy RD&D, including $45 million to build a wind turbine
    drivetrain testing facility and $10 million for the National Renewable
    Energy Laboratory's (NREL) National Wind Technology Center (NWTC). In
    May, he announced $25 million to construct and fund first-year
    operating expenses for the Massachusetts Wind Technology Testing Center
    to test large wind turbine blades.
        In total, the ARRA funding and the President's budget still fall
    short of the $161 million in annual DOE, non-transmission funding
    identified through the AWEA R&D Committee effort to meet the goal of
    providing 20 percent of our Nation's electricity from wind energy by
    2030. $45 million for the drivetrain testing facility will be used for
    construction expenses, as will most of the $25 million provided for the
    large blade test facility. The $10 million for the NWTC will fund
    infrastructure improvements to the facility. As a result, a budget gap
    of $30 million remains between the wind industry's RD&D needs and
    fiscal year 2010 Federal funding for wind RD&D.
        The President's fiscal year 2010 budget for the DOE Wind Program
    includes just over $11 million for ``technology acceptance.'' Within
    this category, one of the wind industry's top priorities is improving
    radar and electro-magnetic fields assessment and mitigation. The
    Department of Defense, Federal Aviation Administration, and other
    Government agencies are concerned about the impact wind projects have
    on radar systems. Funding mitigation methods is crucial for opening new
    areas for wind energy development.
        The wind industry has also identified the need to fund programs to
    educate local policymakers and the general public. Such programs are
    critically important to provide communities with reliable, objective
    information about wind projects.
        The working group mentioned above determined that $19 million is
    needed to fund radar assessment and mitigation and the education of the
    public and local decisionmakers on wind energy issues. Out of the $105
    million request, AWEA would appreciate an increase of $8 million to
    ensure that the DOE Wind Program's technology acceptance efforts meet
    industry needs and to facilitate the installation of more wind energy
    projects across the country.
        Finally, as mentioned earlier, overcoming the transmission
    challenges associated with grid integration and transmission expansion
    is another top priority for the wind industry. Regardless of which
    office receives funding for grid integration and transmission
    development, it is crucial that OE and DOE's Office of Energy
    Efficiency and Renewable Energy (EERE) work together to assist
    utilities in their efforts to produce grid integration solutions
    related to wind variability while incorporating expertise in place at
    DOE national laboratories, such as NREL. EERE, OE, and NREL should also
    work closely with organizations like the Utility Wind Integration Group
    (UWIG) to resolve grid integration challenges associated with wind
    energy development.

                        GENERAL WIND INDUSTRY PRIORITIES

        The wind industry generally supports Federal funding for the
    following areas:
        Wind Turbine Technology and Reliability.--This area should focus on
    the development of wind turbine components to reduce capital costs,
    improve performance, and enhance reliability to achieve the 20 percent
    vision by 2030.
        AWEA also recognizes the need to reduce the cost of offshore wind
    energy technology to provide the estimated 54 gigawatts (GW) of the 300
    GW needed to meet the 20 percent goal by 2030. For this reason, AWEA
    requests that any funding for the DOE Wind Program above the $105
    million request be provided for the development of offshore-specific
    technology. Although the immediate needs for wind technology and
    deployment are focused on land-based development, AWEA recognizes that
    offshore wind development offers a substantial opportunity for
    additional wind development.
        Systems Integration.--This program area focuses on the power system
    operations issues of integrating variable, non-dispatchable power
    sources into the power system. Areas of special focus include
    developing and promoting advanced forecasting methods, developing and
    analyzing additional sources of system flexibility, expanding and
    implementing power system operation tools, and supporting
    interconnection-wide integration studies and plans.
        Transmission Expansion.--Transmission expansion has been identified
    as one of the key areas of focus for meeting the 20 percent by 2030
    wind energy goal. This area of funding should focus on issues related
    to expanding the transmission grid to increase access to wind resource
    areas.
        Education and Workforce Development.--NREL has identified the lack
    of skilled workers as one of the biggest non-technical barriers to the
    growth of renewable energy industries. In addition to educating
    policymakers and stakeholders about wind power development, areas of
    special focus include making sure that DOL and DOE work together to
    increase the supply of professionals and technical specialists with
    wind-energy specific knowledge.
        Resource Modeling and Wind Power Plant Efficiency Assessment.--A
    better understanding of wind resources and of turbine wake effects
    would provide an immediate benefit for projects to be sited and
    arranged to optimize energy yield and improve performance. Areas of
    special focus include funding for test centers to better understand
    wind flow models, research on the effect of wind turbines under unusual
    atmospheric conditions, and funding for wake loss models.
        Siting (Resources, Land Use, Environmental Interface).--Greater
    funding for wind project siting issues would help the wind industry
    avoid unnecessary wind deployment delays, thus helping the industry to
    stay on track to meet the 20 percent vision by 2030. In general,
    increased funding in this area should be targeted toward better
    understanding the impact of wind turbines on wildlife and radar
    installations and mitigating these impacts.
        Small Wind (Turbines 100 Kilowatts and Smaller).--Greater Federal
    funding for these systems would help the small wind industry serve end
    users directly with domestic, on-site generation.

                                   CONCLUSION

        The President and Congress have called for a bolder commitment to
    the development of domestic renewable energy resources, particularly
    wind energy, to meet our Nation's growing energy needs. Continued
    investments in wind energy RD&D are delivering value for taxpayers by
    fostering the development of a domestic energy source that strengthens
    our national security, provides economic development, spurs new high-
    tech jobs, and helps protect the environment.
        While the wind industry continues adding new generation capacity, a
    number of challenges still exist. Continued support for DOE's wind
    program is vital to helping wind become a more prominent energy source
    that leads to a host of economic and environmental benefits. AWEA urges
    the subcommittee to include $105 million for the DOE Wind Energy
    Program in fiscal year 2010. Any additional funding above this amount
    should be directed toward the advancement of offshore wind system
    technology.
        AWEA would also appreciate the subcommittee providing OE with the
    $208 million included in the President's budget request. As mentioned
    earlier, the President's budget request for OE includes approximately
    $73 million that, at least in part, would benefit transmission
    development and grid integration related to wind deployment, including
    $20 million specifically for ``transmission reliability and renewable
    integration.''
        AWEA appreciates this opportunity to provide testimony on DOE's
    fiscal year 2010 Wind Energy Program budget before the Senate
    Appropriations Subcommittee on Energy and Water Development. We thank
    the subcommittee for its time and attention to our request.
                                     ______

         Prepared Statement of the American Society of Plant Biologists

        On behalf of the American Society of Plant Biologists (ASPB) we
    submit this statement for the official record to support increased
    funding for the Department of Energy's Office of Science for fiscal
    year 2010 that would keep the Office on a doubling path. The testimony
    highlights the importance of biology, particularly plant biology, as
    the Nation seeks to address vital issues including climate change and
    energy security. We would also like to thank the subcommittee for its
    consideration of this testimony and for its strong support for the
    basic research mission of the Department of Energy's Office of Science.
        The American Society of Plant Biologists is an organization of more
    than 5,000 professional plant biologists, educators, graduate students,
    and postdoctoral scientists. A strong voice for the global plant
    science community, our mission--which is achieved through engagement in
    the research, education, and public policy realms--is to promote the
    growth and development of plant biology and plant biologists and to
    foster and communicate research in plant biology. The Society publishes
    the highly cited and respected journals Plant Physiology and The Plant
    Cell, and it has produced and supported a range of materials intended
    to demonstrate fundamental biological principles that can be easily and
    inexpensively taught in school and university classrooms by using
    plants.

      FOOD, FUEL, CLIMATE CHANGE, AND HEALTH--PLANT BIOLOGY RESEARCH AND
                                AMERICA'S FUTURE

        Plants are vital to our very existence. They harvest sunlight,
    converting it to chemical energy for food and feed; they take up carbon
    dioxide and produce oxygen; and they are almost always the primary
    producers in the Earth's ecosystems. Indeed, basic plant biology
    research is making many fundamental contributions in the areas of fuel
    security and environmental stewardship; the continued and sustainable
    development of better foods, fabrics, and building materials; and in
    the understanding of basic biological principles that underpin
    improvements in the health and nutrition of all Americans. To go
    further, plant biology research can help the Nation both predict and
    prepare for the impacts of climate change on American agriculture, and
    it can make major contributions to our Nation's efforts to combat
    global warming.
        In particular, plant biology is at the center of numerous
    scientific breakthroughs in the increasingly interdisciplinary world of
    alternative energy research. For example, interfaces among plant
    biology, engineering, chemistry, and physics represent critical
    frontiers in both basic biofuels research and bioenergy production.
    Similarly, with the increase in plant genome sequencing and functional
    genomics, the interface of plant biology and computer science is
    essential to our understanding of complex biological systems ranging
    from single cells to entire ecosystems.
        Despite the fact that plant biology research--the kind of research
    funded by the DOE--underpins so many vital practical considerations for
    our country, the amount invested in understanding the basic function
    and mechanisms of plants is relatively small when compared with the
    impact it has on multibillion dollar sectors of the economy like energy
    and agriculture.

                                RECOMMENDATIONS

        ASPB, as a spokesperson for the plant science community, is in an
    excellent position to articulate the Nation's plant science priorities
    as they relate to bioenergy and, specifically, with regard to
    recommendations for bioenergy research funding through the Department
    of Energy's Office of Science. Our recommendations, in no particular
    order, are as follows:
      --We commend the DOE Office of Science, through their Divisions of
            Basic Energy Sciences (BES) and Biological and Environmental
            Research (BER) for funding the Bioenergy Research Centers (BER)
            and the recently awarded Energy Frontier Research Centers
            (BES). Although these efforts are well designed and a
            significant step forward, these large centers will not have a
            monopoly on good ideas. Therefore, ASPB strongly encourages the
            appropriation of additional funds for the DOE Office of Science
            that would be specifically targeted to the funding of
            individual or small group grants for bioenergy research, like
            the Single-Investigator and Small-Group Research (SISGR)
            projects funded through BES in fiscal year 2009.
      --The DOE Office of Science is the primary funding agency for
            physical science research. Past experience teaches us that many
            major scientific and technical breakthroughs occur at the
            interface between traditional scientific disciplines.
            Therefore, ASPB recommends appropriations that would
            specifically target the interface between plant biology and the
            physical sciences to encourage multidisciplinary and cross-
            disciplinary research that would address significant problems
            in bioenergy research.
      --Photosynthetic research is one clear example of an interface
            between the physical sciences and biology. The DOE BER has been
            the major source of funds for basic studies of photosynthesis,
            which is the primary source of chemical energy on the planet.
            After all, fossil fuels are just photosynthetic energy that was
            trapped eons ago and converted through natural processes into
            the forms in which we use it today. However, the current
            funding available for photosynthetic research is not
            commensurate with the central role that photosynthesis plays in
            energy capture and carbon sequestration. Hence, ASPB calls for
            an increase in appropriations to BER to expand its research
            portfolio in the area of photosynthesis and carbon capture.
      --Climate change is real and will have significant impacts on
            agriculture and our way of life for the foreseeable future.
            There are significant questions that must be answered as to how
            climate change will impact food production and the environment.
            There are also clear opportunities to use biological systems to
            ameliorate climate change, such as through carbon sequestration
            or modification of plants to resist environmental stress.
            Therefore, ASPB calls for additional funding focused on studies
            of the effect of climate change on agricultural cropping
            systems, basic studies of effects on plant growth and
            development, and targeted research focused on modification of
            plants to resist climate change and for use in carbon
            sequestration.
      --Current estimates predict a significant shortfall in the needed
            scientific and engineering workforce in the energy area. The
            DOE Office of Science has traditionally not been a major
            funding agency for education and training, other than that
            which occurs through the funding of individual investigator and
            center grants. Given the expected need for additional
            scientists and engineers who are well-grounded in
            interdisciplinary research and development activities, ASPB
            calls for funding of specific programs (e.g., training grants)
            that are targeted to provide this needed workforce over the
            next 10 years and to adequately prepare them for careers in the
            interdisciplinary energy research of the future.
      --The revolution in biological technology that has given rise to the
            various--omics subdisciplines has also generated enormous
            datasets that reveal the tremendous complexity of biological
            systems. Computational biology is a relatively new discipline
            that arose from the interface of computer science and biology.
            These new technologies and approaches provide the only means by
            which these large biological datasets can be integrated and
            mined for new, relevant biological knowledge. Therefore, as
            discussed in item two above, ASPB calls for additional funding
            that would target this interface between biology and computer
            science. Specifically, we call for additional funding to
            develop computational platforms to develop a systems-level view
            of biology through the integration of data obtained from a
            variety of functional genomics approaches. This is clearly a
            ``grand challenge'' that is currently limiting the utility of
            this information. Additionally, we call for the funding of
            robust education and professional development programs,
            including training grants, that target the interface between
            computer and biological science.
      --Considerable research interest is now being paid to the use of
            plant biomass for energy production. Progress in this area has
            been strongly affected by the ``fuel vs. food'' debate, which
            arose from the current emphasis on the use of corn for ethanol
            production. A response to this debate has been to switch the
            focus to plants that can be grown exclusively for biomass
            (e.g., switchgrass, miscanthus, etc). However, if these crops
            are to be used to their full potential, considerable effort
            must be expended to improve our understanding of their basic
            biology and development, as well as their agronomic
            performance. Unlike our current, major crops (e.g., soybean,
            corn), these novel crops have not benefitted from the many
            years of improvements in crop management and breeding--
            improvements that, among other things, have vastly increased
            yield and agronomic efficiency. Although similar efforts to
            improve targeted bioenergy crops are just beginning, we have
            established very aggressive goals for the use of these crops to
            meet the Nation's fuel needs. Therefore, ASPB calls for
            additional funding that would be targeted to efforts to
            increase the utility and agronomic performance of bioenergy
            crops.
        Thank you for your consideration of our testimony on behalf of the
    American Society of Plant Biologists. Please do not hesitate to contact
    the American Society of Plant Biologists if we can be of any assistance
    in the future. For more information about the American Society of Plant
    Biologists, please see www.aspb.org.
                                     ______

     Prepared Statement of the American Society of Agronomy, Crop Science
          Society of America, and the Soil Science Society of America

        Dear Chairman Dorgan, Ranking Member Bennett and members of the
    subcommittee, the American Society of Agronomy (ASA), Crop Science
    Society of America (CSSA), and Soil Science Society of America (SSSA)
    are pleased to submit the following funding recommendations for the
    Department of Energy for fiscal year 2010. For the Office of Science,
    ASA, CSSA, and SSSA recommend a funding level of $5.0 billion, a 4.8
    percent increase over fiscal year 2009 ($4.722 billion). For the Office
    of Energy Efficiency and Renewable Energy, we recommend a funding level
    of $2.061 billion, a 7 percent increase over fiscal year 2009.
    Specifics for each of these and other budget areas follow below.
        With more than 25,000 members and practicing professionals, ASA,
    CSSA, and SSSA are the largest life science professional societies in
    the United States dedicated to the agronomic, crop and soil sciences.
    ASA, CSSA, and SSSA play a major role in promoting progress in these
    sciences through the publication of quality journals and books,
    convening meetings and workshops, developing educational, training, and
    public information programs, providing scientific advice to inform
    public policy, and promoting ethical conduct among practitioners of
    agronomy and crop and soil sciences.

                     DEPARTMENT OF ENERGY OFFICE OF SCIENCE

        The American Society of Agronomy, Crop Science Society of America,
    and Soil Science Society of America (ASA, CSSA, and SSSA) thank the
    Senate Energy and Water Appropriations Subcommittee (subcommittee) for
    providing $1.6 billion from Public Law 111-5, the ``American Recovery
    and Reinvestment Act of 2009 (act)'' for research funding through DOE's
    Office of Science, which oversees the Nation's research programs in
    climate science, advanced computing, and biofuels areas crucial to our
    energy future. The act also provides $2.5 billion for Research,
    Development, and Demonstration at universities, companies, and national
    laboratories for which we are very grateful.
        ASA, CSSA, and SSSA understand the challenges the Senate Energy and
    Water Appropriations Subcommittee faces with the tight budget for
    fiscal year 2010. We also recognize that the Energy and Water
    Appropriations bill has many valuable and necessary components, and we
    applaud the subcommittee for funding the DOE Office of Science in the
    fiscal year 2009 Omnibus Appropriations bill at $4.772 billion. For
    fiscal year 2010, ASA, CSSA, and SSSA recommend a funding level of $5.0
    billion, a 4.8 percent increase over fiscal year 2009. Under the Energy
    Policy Act of 2005 (Public Law 109-58), the Office of Science was
    authorized to receive $5.2 billion in fiscal year 2009.
        The Office of Science supports graduate students and postdoctoral
    researchers early in their careers. Nearly one-third of its research
    funding goes to support research at more than 300 colleges and
    universities nationwide. Moreover, approximately half the users at
    Office of Science user facilities are from colleges and universities,
    providing further support to their researchers. The Office of Science
    also reaches out to America's youth in grades K-12 and their teachers
    to help improve students' knowledge of science and mathematics and
    their understanding of global energy and environmental challenges. This
    recommended funding level of $5.0 billion is critical to ensuring our
    future energy self-sufficiency and as a means to address major
    environmental challenges including global climate change. Finally, a
    funding level of $5.0 billion will allow the Office of Science to:
    maintain and strengthen DOE's core research programs at both the DOE
    national laboratories and at universities; provide support for 1,000
    PhDs, postdoctoral associates, and graduate students in fiscal year
    2010; ensure maximum utilization of DOE research facilities; allow the
    Office of Science to develop and construct the next generation
    facilities necessary to maintain U.S. preeminence in scientific
    research; and enable DOE to continue to pursue the tremendous
    scientific opportunities outlined in the Office of Science Strategic
    Plan and in its 20 Year Scientific Facilities Plan.

                             BASIC ENERGY SCIENCES

        Within the Office of Science, the Basic Energy Sciences (BES)
    Program is a multipurpose, scientific research effort that fosters and
    supports fundamental research to expand the scientific foundations for
    new and improved energy technologies and for understanding and
    mitigating the environmental impacts of energy use. ASA, CSSA, and SSSA
    support a fiscal year 2010 funding level of $1.682 billion, a 7 percent
    increase over fiscal year 2009, for BES.
        The portfolio of programs at BES supports research in the natural
    sciences by focusing basic (discovery) research on, among other
    disciplines, biosciences, chemistry and geosciences. Practically every
    element of energy resources, production, conversion and waste
    mitigation is addressed in basic research supported by BES programs.
    Research in chemistry has lead to the development of new solar
    photoconversion processes and new tools for environmental remediation
    and waste management. Research in geosciences leads to advanced
    monitoring and measurement techniques for reservoir definition.
    Research in the molecular and biochemical nature of photosynthesis aids
    the development of solar photo-energy conversion.
        Within the Basic Energy Sciences Program, the Chemical Sciences,
    Geosciences, and Energy Biosciences subprogram supports fundamental
    research in geochemistry, geophysics and biosciences. ASA, CSSA, and
    SSSA recommend $317,910,910 a 7 percent increase over the fiscal year
    2009 funding level. The Geosciences Research Program supports research
    focused at developing an understanding of fundamental Earth processes
    that can be used as a foundation for efficient, effective, and
    environmentally sound use of energy resources, and provide an improved
    scientific basis for advanced energy and environmental technologies.
    The Biosciences Research Program supports basic research in molecular
    level studies on solar energy capture through natural photosynthesis;
    the mechanisms and regulation of carbon fixation and carbon energy
    storage; the synthesis, degradation, and molecular interconversions of
    complex hydrocarbons and carbohydrates; and the study of novel
    biosystems and their potential for materials synthesis, chemical
    catalysis, and materials synthesized at the nanoscale.

                     BIOLOGICAL AND ENVIRONMENTAL RESEARCH

        Within the Office of Science, the Biological and Environmental
    Research (BER) Program, is a key component to developing and delivering
    the knowledge needed to support the President's plan to make America
    energy independent. ASA, CSSA, and SSSA support a 7 percent increase
    for BER which would bring the funding level to $643,647,800 for fiscal
    year 2010. ASA, CSSA, and SSSA support a variety of programs within BER
    including the Life Sciences subprogram which supports Carbon
    Sequestration Research (we recommend $8 million for fiscal year 2010),
    and the Genomes to Life (GTL) program. Within Genomes to Life are
    programs supportive of bioenergy development including GTL Foundation
    Research, GTL Sequencing, GTL Bioethanol Research, and GTL Bioenergy
    Research Centers, all playing an important role in achieving energy
    independence for America. Also within BER is the Environmental
    Remediation subprogram and its Environmental Remediation Sciences
    Research program, both critical programs to advancing tools needed to
    clean up contaminated sites. ASA, CSSA, and SSSA recommend a funding
    level of $190,381,000, a 7 percent increase over fiscal year 2010 for
    Climate Change Research subprogram. This subprogram supports important
    areas of climate change research including: Climate Forcing which
    supports the Terrestrial Carbon Processes program and the Ameriflux
    network of research sites (which should receive $17 million in
    funding), as understanding the role that terrestrial ecosystems play in
    capturing and storing carbon is essential to developing strategies to
    mitigate global climate change. An additional program of high
    importance within the Climate Change Research subprogram is the Climate
    Change Response and its associated programs--Ecosystem Function and
    Response, and Education. Finally, also under the Climate Change
    Research subprogram is the Climate Change Mitigation program, part of
    BER's support to the Climate Change Technology Program, which will
    continue to focus only on terrestrial carbon sequestration.
     department of energy office of energy efficiency and renewable energy
        The Office of Energy Efficiency and Renewable Energy (EERE) manages
    America's investment in the research and development (RD&D) of DOE's
    diverse energy efficiency and renewable energy applied science
    portfolio. For the Office of Energy Efficiency and Renewable Energy, we
    recommend a funding level of $2.061 billion, a 7 percent increase over
    fiscal year 2009. The fiscal year 2010 EERE budget should continue to
    maintain focus on key components of the AEI and Twenty in Ten including
    the Biofuels Initiative to develop affordable, bio-based transportation
    fuels from a wider variety of feedstocks and agricultural waste
    products.
        Note: ASA, CSSA, and SSSA strongly oppose the use by the Department
    of the terms ``agricultural wastes'' or ``crop wastes'' when referring
    to crop residue. Crop residues, e.g., corn stover, etc. play a very
    important role in nutrient cycling, erosion control and organic matter
    development. Recent studies have shown that excessive removal of crop
    residues from agricultural lands can lead to a decline in soil quality.
    By no means should they ever be referred to as ``wastes''.

                        BIOMASS AND BIOREFINERY SYSTEMS

        Within EERE, the Biomass and Biorefinery Systems R&D program plays
    an important role providing support for Regional Biomass Feedstock
    Development Partnerships and Infrastructure Core R&D programs, both
    within Feedstock Infrastructure. For the Biomass and Biorefinery
    Systems R&D program, we recommend a 7 percent increase for fiscal year
    2010 which would bring funding to $190,381,000. The mission of the
    Biomass Program is to develop and transform our domestic, renewable,
    and abundant biomass resources into cost-competitive, high performance
    biofuels, bioproducts and biopower through targeted RD&D leveraged by
    public and private partnerships. ASA, CSSA, and SSSA support $18
    million in funding for the Feedstock Infrastructure program.

                            CLIMATE CHANGE RESEARCH

        ASA, CSSA, and SSSA urge the subcommittee to continue to provide
    strong support for Climate Change Research to the following programs as
    follows: Climate Change Science Program (CCSP), $150 million; Climate
    Change Research Initiative (CCRI), $25,672,000; and Climate Change
    Technology Program (CCTP), $850,301,000. These three programs together
    will increase our understanding of the impacts of global climate change
    and also develop tools and technologies to mitigate these impacts.

                       BASIC AND APPLIED R&D COORDINATION

        The Office of Science continues to coordinate basic research
    efforts in many areas with the Department's applied technology offices.
    Within this area is Carbon Dioxide Capture and Storage R&D for which we
    recommend $20,055,000.

                             NATIONAL LABORATORIES

        The Office of Science manages 10 world-class laboratories, which
    often are called the ``crown jewels'' of our national research
    infrastructure. The national laboratory system, created over a half-
    century ago, is the most comprehensive research system of its kind in
    the world. Five are multi-program facilities including the Oak Ridge
    National Laboratory.

                  NATIONAL ENERGY TECHNOLOGY LABORATORY (NETL)

        ASA, CSSA, and SSSA urge the subcommittee to direct the Department
    to increase funding for its terrestrial carbon sequestration program,
    specifically The Regional Carbon Sequestration Partnerships, whose
    collaborations are essential to maintain.

                      OAK RIDGE NATIONAL LABORATORY (ORNL)

        ORNL is one of the world's premier centers for R&D on energy
    production, distribution, and use and on the effects of energy
    technologies and decisions on society.
        Thank you for your thoughtful consideration of our requests.
                                     ______

    Prepared Statement of the Center for Advanced Separation Technologies,
              Virginia Polytechnic Institute and State University

        Chairman Dorgan, Ranking Member Bennett, and members of the
    subcommittee, I represent the Center for Advanced Separation
    Technologies (CAST), which is a consortium of five universities with
    strong programs in coal mining and processing. I appreciate the
    opportunity to submit this testimony requesting that your subcommittee
    add $3 million to the 2010 Fuels Program budget, Fossil Energy Research
    and Development, U.S. Department of Energy, for advanced separations
    research. Research in advanced separations technology development is
    authorized by the Energy Policy Act of 2005, title IX, subtitle F, sec.
    962. I am joined in this statement by my colleagues from four other
    member universities: Richard A. Bajura, West Virginia University; Rick
    Q. Honaker, University of Kentucky; Peter H. Knudsen, Montana Tech of
    the University of Montana; Jan D. Miller, University of Utah.
        funding request for center for advanced separation technologies
        Fossil energy accounts for 86 percent of the energy used in the
    United States and the world. Due to concerns for global warming, the
    U.S. Government is making major investments in developing renewable
    energy resources and carbon capture and sequestration (CCS)
    technologies. However, it will take a while for many of the new
    technologies to come on line. Therefore, CAST will continue to develop
    advanced technologies that can be used to produce fossil fuels with
    minimal environmental impacts and to capture the harmful effluents
    generated from the utilization of fossil fuels.
        Between 1990 and 2008, U.S. emissions of CO2 from fossil
    fuel combustion grew by 27 percent. But the emissions in China rose 150
    percent, from 2.3 to 5.9 billion tons. China's CO2 emissions
    are now estimated to be about 24 percent of the global total,
    surpassing the U.S. contribution of 21 percent (State of the World
    2009). It is projected that by 2030 developing countries will account
    for more than 75 percent of the increase in global CO2
    emissions. Thus, the United States must engage developing countries in
    its effort to curb CO2 emissions.
        A serious problem in China and India is that much of the coal is
    burned as mined without cleaning, causing low thermal efficiencies. In
    these two countries, the thermal efficiencies for power generation are
    29 percent in average as compared to 38 percent in the United States.
    By increasing the efficiency to 33 percent by way of improving coal
    quality, the CO2 emissions in China can be reduced by 20
    percent. According to a recent IEA report, India could reduce
    CO2 emissions by 55 percent using state-of-the-art
    technologies relating to coal quality, boiler/generator design,
    instrumentation and control, and high voltage distribution systems
    (Couch, 2002). Unfortunately, much of the coal burned in India is of
    low quality, assaying 35-42 percent ash, while the ash contents of the
    coals burned for power generation are mostly less than 8 percent.
    Helping China and India improve the quality of their coal burned for
    power generation would be the first step toward deploying clean coal
    technologies (CCT) and reducing CO2 emissions substantially.
        It is, therefore, the objective of CAST research to develop
    advanced technologies that can be used to remove various impurities
    from coal, so that it can be burned more cleanly and efficiently. These
    technologies can also be used to minimize the problems associated with
    waste disposal at mine sites and power plants, and help reduce
    CO2 emissions in developing countries. It is also the
    objective to study and develop methods of extracting other fossil
    energy resources, such as oil sands, oil shale, and methane hydrates in
    environmentally acceptable manner.

                           SUMMARY OF ACCOMPLISHMENT

        Cleaning coal becomes more difficult and costly as the size of coal
    particles becomes smaller. Therefore, many companies discard coal fines
    to impoundments along with the water that is used for their washing
    operations, or inject the coal-water slurries into abandoned,
    underground mines. The latter practice has been drawing criticism, as
    the water containing toxic elements (and sometimes the slurry itself)
    contaminates drinking water (Smith, V., AP News, March 21, 2009). The
    fine coal impoundments also pose environmental threats as they
    occasionally fail, releasing billions of gallons of slurry into the
    neighborhoods and rivers. Recognizing the seriousness of these
    problems, CAST has been developing a series of advanced fine coal
    cleaning technologies over the years. During the last few years, we
    have been focusing on developing methods of removing water (dewatering)
    from fine coal slurry, which is regarded one of the most
    technologically challenging problems for the coal industry. During
    2008-2009, CAST has completed testing the hyperbaric centrifugal
    dewatering technology in operating plants. The results of the
    successful test program have been highlighted in Techline, DOE's web
    newsletter, in February 2009. Industry leaders consider this new
    development as the most significant technological breakthrough in 20
    years.
        CAST is also well known for its expertise in separating fine coal
    from ash-forming minerals. One success story was the development of the
    MicrocelTM flotation technology, which is widely used around
    the world. During the last 2 years, FLSmidth Minerals, Salt Lake City,
    Utah, which is one of the world's largest mining equipment companies,
    has provided $900,000 of research funding to develop a mathematical
    model for the separation process. This industrial funding was provided
    as a matching fund against the $250,000 of CAST fund allocated for this
    project. The results of the project will be used to help the company
    improve the designs of the currently marketed flotation machines.
        Indian coal is notoriously difficult to clean, because ash-forming
    minerals are finely disseminated in the coal matrix. Using conventional
    methods, it is difficult to reduce the ash content to below 12-14
    percent by weight even for high-quality metallurgical coals. With the
    help of the U.S. Department of Energy, CAST is negotiating a $1.2
    million research contract with Coal India Limited (CIL), in which a 75-
    tonnes per hour coal cleaning plant is designed, constructed by CIL,
    and demonstrated. The plant will be using the advanced technologies
    developed at CAST to reduce the ash content to below 8 percent.
        In addition, CAST is testing a pilot-scale dry coal cleaning
    technology in India. This project is funded by the Department of State
    (DOS) in the amount of $1.1 million as part of the Asia Pacific
    Partnership (APP) for Clean Development and Climate program. The pilot-
    scale test unit has been shipped to India for on-site testing, which
    will begin within a month. The objective of this project and the one
    described in the forgoing paragraph is to help India clean coal before
    burning, which is considered the lowest-cost option to reduce
    CO2 emissions in the country.
        CAST research activities helped the fossil energy industries in
    Utah, including coal, oil sand and oil shale industries. For example,
    CAST funds have helped to sustain the development of new technology for
    the efficient utilization of western coal by Ambre Energy, North
    America, a Salt Lake City based company. Ambre Energy has licensed a
    University of Utah technology as part of their plans to construct a
    $300 million plant which will include, among others the production of
    advanced transportation fuels from western coal resources.
        In the areas of post-combustion clean-up, CAST has developed
    metallic filters that can remove mercury from the flue gas generated at
    coal-fired power plants. Based on the successful laboratory test
    results, the mercury filters were tested at the PPL's Colstrip power
    plant in Montana. The removal efficiency was greater than 90 percent,
    verifying laboratory experiments. The mercury absorbed on the metallic
    filters were stripped off by an in situ thermal treatment, so that the
    filter can be reused and the mercury be collected for commercial use.
        All of the fossil fuels, including coal, oil, natural gas, methane
    in hydrate, kerogen in oil shale, and bitumen in oil sands, are
    naturally hydrophobic. During 2008-2009, CAST has made significant
    advancements in the basic understanding of the nature of hydrophobicity
    and hydrophobic interactions. The results will be useful not only for
    developing these energy resources but also for separating different
    gases from each other. It is possible to convert one type of gas to
    hydrate (solid) leaving the others in gaseous form, thereby achieving
    separation.

                                 PROPOSED WORK

        Although coal is regarded as ``dirty'' fuel, it will take some time
    before clean, renewable fuels can replace coal substantially. According
    to the 2008 International Energy Outlook (EIA, September 2008), coal
    consumption will increase faster than any other energy resource,
    particularly in China. Therefore, it is important to continue to
    develop methods of recovering and utilizing coal with minimal
    environmental impacts. To meet this objective, CAST will develop
    technologies that can be used to minimize the environmental problems
    both at mine sites (e.g., refuse pond and runoff water from valley-fill
    mining operations) and coal-burning power plants (e.g. ash pond,
    mercury emissions, and CO2 emissions).
        In addition to the hyperbaric centrifuge described above, CAST has
    been developing a novel technology that can remove water, ash, and
    other impurities simultaneously. Laboratory tests showed that this new
    technology can produce clean coal with lower moisture and lower ash
    contents at higher coal recoveries than can be achieved by using a
    combination of the Microcel and the centrifuge technologies. The new
    technology can, therefore, be implemented at lower capital cost and
    will be particularly useful for recovering coal from fine coal
    impoundments. During 2009-2010, the new process will be tested on a
    bench-scale continuous mode. Several companies have expresses strong
    interest in commercializing this new technology.
        An important part of developing coal cleaning technologies is
    technology transfer. Therefore, CAST will devote considerable resources
    for on-site testing, problem solving, and offering short-courses and
    seminars for plant operators. Keeping industry operators abreast of
    CAST research will expedite the technology transfer and help the U.S.
    companies maintain a clean environment near mine sites.
        Using the improved understanding of the basic sciences involved in
    gas hydrate formation, CAST will also develop methods of separating
    gases from each other. The methods will be based on solidifying one-
    type of gas as hydrate while keeping the others in gaseous form. For
    example, CO2 and nitrogen present in combustion gases can be
    readily separated from each other by the selective hydrate formation
    method. One problem associated with the approach is the slow kinetics
    of hydrate formation. It is, therefore, proposed to find ways to
    increase the kinetics by using additives. The gas-gas separation
    process by forming hydrates can have higher capacity and lower cost
    than other methods.
        The proposed research can also lead to the development of efficient
    methods for extracting methane from hydrate resources. The National
    Energy Technology Laboratory is spearheading a program to extract
    methane from the Alaskan North Slope with the objective of producing
    methane by 2015. CAST will explore the possibility of extracting
    methane from marine hydrate resources. It is estimated that the United
    States has 200,000 Tcf of methane as hydrate, while the proven reserve
    for dry natural gas is only 238 Tcf. The Blake Ridge deposit alone, off
    the shores of the Carolinas, has 1,300 Tcf of methane. Thus, the
    research on gas hydrate will lead to the development of unconventional
    gas resources, development of efficient gas-gas separation methods,
    sequestration of CO2 as hydrate, and transport and storage
    of methane and hydrogen.

                                FUNDING REQUEST

        It is requested that $3 million of funding for CAST be added to the
    fiscal year 2010 Fuels Program budget, Fossil Energy R&D, U.S.
    Department of Energy. Continued funding will allow CAST to develop
    advanced technologies for producing domestic energy resources in an
    environmentally acceptable manner, while helping developing countries
    reduce CO2 emissions. The new technologies can also minimize
    concerns related to ash and refuse ponds and the runoff water at
    valley-fill mining operations. In addition, the new gas-gas separations
    technologies will have crosscutting applications for a wide spectrum of
    the Fossil Energy R&D programs.
                                     ______

      Prepared Statement of the Friends Committee on National Legislation
                                   (Quakers)

        The Friends Committee on National Legislation (Quakers) thanks the
    subcommittee for the opportunity to submit this testimony for the
    record. We appreciate the subcommittee's transparency and willingness
    to open its proceedings to the public. The Washington Post paraphrased
    NNSA Administrator Thomas D'Agostino's testimony before the House
    Appropriations Energy and Water Development Subcommittee on March 24 as
    saying, ``the number of new plutonium triggers that will be needed to
    keep the U.S. nuclear weapons stockpile reliable and secure has
    steadily dropped from 450 a year to 20.''
        Decreased demand, paired with President Obama's call for drastic
    reductions in the U.S. nuclear arsenal, requires for changes at NNSA.
    Our testimony centers on the need to restructure the NNSA budget in
    order to meet today's security demands by adequately funding nuclear
    nonproliferation programs, supporting disablement and dismantlement
    programs in North Korea, reforming spending on the nuclear weapons
    complex, and discontinuing new nuclear weapons programs.

                       NUCLEAR NONPROLIFERATION PROGRAMS

        The subcommittee's commitment to nuclear nonproliferation programs
    has increased international security. The best example of that
    commitment is the increased funding allocated to the Global Threat
    Reduction Initiative (GTRI) in the omnibus appropriations bill for
    fiscal year 2009. Testifying before the Senate Appropriations
    Subcommittee on Energy and Water Development last year (April 30,
    2008), former NNSA Deputy Administrator for Defense Nuclear
    Nonproliferation William Tobey pointed out the successes of GTRI:

        The GTRI program, and its antecedents, have removed approximately
    68 nuclear bombs' worth of highly enriched uranium and secured more
    than 600 radiological sites around the world, collectively containing
    over 9 million curies, enough radiation for approximately 8,500 dirty
    bombs. In the United States the GTRI program has removed over 16,000
    at-risk radiological sources, totaling more than 175,000 curies--enough
    for more than 370 dirty bombs.

        A graph of funding for GTRI over the past 4 years shows why the
    program has succeeded. We thank the subcommittee for supporting GTRI
    and believe, as is evidenced by Deputy Administrator Tobey's testimony,
    that the marginal benefit to international security from every dollar
    spent on nuclear nonproliferation programs is greater than that of any
    other dollar spent on national defense.

        Other nuclear nonproliferation programs, such as the International
    Nuclear Materials Protection and Cooperation Program (MPC&A), which
    secures weapons-usable nuclear material in other countries, are in need
    of similar funding increases to accelerate the speed of finding and
    securing nuclear material, and upgrading the infrastructure which keeps
    weapons-grade material out of the wrong hands. As you can see, the
    previous administration's requests for MPC&A funding has been just
    above stagnant over the past several years. This year, Congress cut
    funds for MPC&A by $230 million because the program is winding down in
    Russia. Nevertheless, we believe the program should be expanded beyond
    Russia. Increasing and expanding MPC&A could be critical to achieving
    President Obama's goal to account for and secure all nuclear warheads
    and loose nuclear material around the world by the end of his first
    term.

        We call on the subcommittee to make sufficient investments in the
    next generation of nuclear nonproliferation scientists. President Obama
    has stated that a top priority of his administration will be
    negotiating a verifiable fissile material cutoff treaty. Without
    expanding the pool of safeguards and other nonproliferation experts and
    drawing new talent into the field, the President's goal will not be
    achieved.
        Administrator D'Agostino testified before the House Appropriations
    Energy and Water Development Subcommittee that the Federal Government
    has been unable to lure top tier scientific talent at institutions of
    higher learning away from the private sector. The Administrator pointed
    to fields such as radioanalytic chemistry, in which graduates could
    seek research careers in nuclear forensics. Instead, these students are
    increasingly choosing lucrative offers from private industry over the
    opportunity to serve the country. The subcommittee must determine ways
    to reverse this trend.

                            NUCLEAR WEAPONS COMPLEX

        Administrator D'Agostino was blunt in pointing out that, ``We must
    stop pouring money into an old, cold war complex that is too big and
    too expensive.'' We could not agree more strongly. The discourse over
    the size and scope of the nuclear weapons complex in recent years has
    mirrored moral, political, and global realities that nuclear weapons
    are becoming obsolete.
        The numbers are striking. In 2005, NNSA proposed a new plutonium
    production facility with a capacity of 450 pits per year. In 2006, this
    figure was reduced to a capacity of 125 pits per year. Again, in 2007,
    the estimated necessary capacity was reduced to 80 pits per year.
    Administrator D'Agostino's testimony indicated that due to the changes
    on nuclear policy set forth by President Obama, NNSA is operating at
    the minimum production capacity of 20 pits per year. Simply put, with
    every passing year, the need for a large-scale capacity to produce
    plutonium pits bounds toward zero.
        We recommend abandoning expensive plans to build new plutonium
    production facilities and focusing on how to secure existing facilities
    while decreasing pit production capacities as the country reduces its
    nuclear stockpile and pushes nuclear weapons toward irrelevance.

                              NEW NUCLEAR WEAPONS

        Proponents of new nuclear weapons have been unable in past years to
    justify to lawmakers a need for programs like the nuclear ``bunker
    buster'' and so-called Reliable Replacement Warhead. Congress has
    declined to fund these programs year after year, culminating with a
    line in the fiscal year 2009 omnibus appropriations bill, ``Development
    work on the Reliable Replacement Warhead will cease.''
        Developing new nuclear weapons sends the wrong message to other
    nations. Rather than leading the way on the path to a nuclear weapons
    free world, the United States would be perceived as taking provocative
    actions and possibly spur reactions that increase global nuclear
    proliferation.
        The subcommittee's scrutiny of nuclear weapons programs in a
    bipartisan basis has led to responsible decisions that avoid sending
    these mixed messages and demonstrate the leadership necessary to move
    forward on the bold changes necessary to achieve the elimination of
    nuclear weapons.

                   NORTH KOREAN DISABLEMENT AND DISMANTLEMENT

        Last year, the Bush administration secured a waiver to the 1994
    Glenn amendment to enable the National Nuclear Security Administration
    to provide assistance for the disablement and dismantlement of North
    Korea's nuclear facilities. However, the waiver, which passed in a
    supplemental appropriations bill for fiscal year 2008 (Public Law 110-
    252, sec. 1405), has not been implemented. The Obama administration
    must implement this waiver to allow for these activities to occur. We
    ask that the subcommittee encourage the administration to implement the
    waiver despite North Korea's recent actions. Should the six party talks
    with North Korea resume and inspectors be allowed back into North
    Korea, delays in implementing the waiver would only slow disablement
    and dismantlement programs.
        Additionally, we urge the subcommittee to fund dismantlement and
    disablement activities in the fiscal year 2009 supplemental
    appropriations bill and the fiscal year 2010 budget at the level of the
    administration's request.
        Thank you for your consideration.
                                     ______

               Prepared Statement of Southern Company Generation

        Mr. Chairman and members of the subcommittee, Southern Company
    operates the U.S. Department of Energy's (DOE's) National Carbon
    Capture Center (NCCC) at the Power Systems Development Facility (PSDF)
    in Wilsonville, AL (http://psdf.southernco.com) for DOE's National
    Energy Technology Laboratory (NETL) and several industrial
    participants.\1\ The PSDF was conceived as the premier advanced coal
    power generation research and development (R&D) facility in the world.
    It has fulfilled this expectation. I would like to thank the Senate for
    its past support of the PSDF and request the subcommittee's continued
    support as the PSDF responds to the need for developing cost-effective
    carbon dioxide (CO2) capture technology for coal fueled
    power generation. This statement supports the administration's budget
    request for DOE coal R&D which includes about $41.5 million for work at
    the PSDF. These funds are necessary to conduct the future test program
    developed in collaboration with DOE which includes wide-ranging support
    of the DOE Carbon Sequestration Technology Roadmap. The future focus of
    the PSDF is to conduct sufficient R&D to advance emerging
    CO2 control technologies to commercial scale for effective
    integration into either combustion or Integrated Gasification Combined
    Cycle (IGCC) processes.
    ---------------------------------------------------------------------------
        \1\ Current PSDF participants include Southern Company, the
    Electric Power Research Institute (EPRI), American Electric Power,
    Luminant, Peabody Energy, Arch Coal, Inc., and Rio Tinto.
    ---------------------------------------------------------------------------
        A key feature of the PSDF is its ability to test new carbon capture
    technologies for coal-based power generation systems at an integrated,
    semi-commercial scale. Integrated operation allows the effects of
    system interactions, typically missed in un-integrated pilot-scale
    testing, to be understood. The semi-commercial scale allows the
    maintenance, safety, and reliability issues of a technology to be
    investigated at a cost that is far lower than the cost of commercial-
    scale testing. Capable of operating at pilot to near-demonstration
    scales, the PSDF is large enough to produce data to support commercial
    plant designs, yet small enough to be cost-effective and adaptable to a
    variety of technology research needs.
        In addition to semi-commercial scale testing, the PSDF will serve
    as a test bed for cost-effective technology screening by providing
    slipstreams of actual syngas from coal gasification and flue gas from
    coal combustion. Future test work at the PSDF will include the scale-up
    and continued development of several CO2 capture
    technologies being developed either at DOE's NETL facility, at private
    R&D laboratories or at the PSDF. The DOE program for CO2
    capture in coal-fueled powerplants is divided into three areas: post-
    combustion capture for conventional pulverized coal plants, pre-
    combustion capture for coal gasification powerplants, and oxy-
    combustion processes which produce a more CO2-rich flue gas
    than conventional combustion for easier CO2 capture. The
    PSDF's CO2 capture efforts would address all three areas.
        Southern Company also supports the goals of the Clean Coal
    Technology Roadmaps developed by DOE, EPRI, and the Coal Utilization
    Research Council (CURC). These Roadmaps identify the technical,
    economic, and environmental performance that advanced clean coal
    technologies can achieve over the next 20 years. Over this time period
    coal-fired power generation efficiency can be increased to over 50
    percent (compared to the current fleet average of 32 percent) while
    producing de minimis emissions and developing cost-effective
    technologies for CO2 management.

                                    SUMMARY

        The United States has historically been a leader in energy
    research. Adequate funding for fossil energy research and development
    programs, including environmental and climate change technologies will
    provide our country with secure and reliable energy from domestic
    resources while protecting our environment. Current DOE fossil energy
    research and development programs for coal, if adequately funded, will
    assure that a wide range of electric generation options are available
    for future needs. Congress faces difficult choices when examining near-
    term effects on the Federal budget of funding energy research. However,
    continued support for advanced coal-based energy research is essential
    to the long-term environmental and economic well being of the U.S.
    Prior DOE clean coal technology research has already provided the basis
    for $100 billion in consumer benefits at a cost of less than $4
    billion. Funding the administration's budget request for DOE coal R&D
    and long-term support of the Clean Coal Technology Roadmap can lead to
    additional consumer benefits of between $360 billion and $1.38
    trillion.\2\ But, for benefits to be realized from advanced coal R&D,
    the critically important R&D program outlined in the Clean Coal
    Technology Roadmap must be conducted.
    ---------------------------------------------------------------------------
        \2\ EPRI Report No. 1006954, ``Market-Based Valuation of Coal
    Generation and Coal R&D in the U.S. Electric Sector'', May 2002.
    ---------------------------------------------------------------------------
        One of the key national assets for achieving these benefits is the
    PSDF. The fiscal year 2010 funding for the PSDF needs to be about $41.5
    million to support construction of new facilities to test technologies
    that are critical to the goals of the DOE Carbon Sequestration
    Technology Roadmap and to the success of the development of cost-
    effective climate change technologies that will enable the continued
    use of coal to supply the Nation's energy needs. The major
    accomplishments at the PSDF to date and the future test program planned
    by DOE and the PSDF's industrial participants are summarized below.

                              PSDF ACCOMPLISHMENTS

        The PSDF test-bed has operated successfully for many years in
    support of U.S.-DOE's advanced coal program. Skilled staff from
    disciplines essential for a successful research program has gained
    experience by designing and operating the test equipment and by working
    with vendors to develop and improve their technologies. The PSDF has
    developed testing and technology transfer relationships with over 50
    vendors to ensure that test results and improvements developed at the
    PSDF are incorporated into future plants. In some instances, testing
    has eliminated technologies from further consideration. Such screening
    is valuable in that it concentrates R&D effort on those technologies
    most likely to succeed and is an essential part of managing the U.S.-
    DOE's financial resources. Major subsystems tested and some highlights
    of the test program at the PSDF include:
        Transport Reactor.--The transport reactor has been operated
    successfully on sub-bituminous, bituminous, and lignite coals as a
    pressurized combustor and as a gasifier in both oxygen- and air-blown
    modes and has exceeded its primary purpose of generating gases for
    downstream testing. Since modifications were made in 2006, subsequent
    testing with air-blown gasifier operations has indicated substantial
    improvements in syngas heating value and carbon conversion. This
    transport technology is projected to be the lowest capital cost coal-
    based power generation option, while providing the lowest cost of
    electricity and excellent environmental performance.
        Advanced Particulate Control.--Two advanced particulate removal
    devices and 28 different filter elements types have been tested to
    clean the product gases, and material property testing is routinely
    conducted to assess their suitability under long-term operation. The
    material requirements have been shared with vendors to aid their filter
    development programs.
        Filter Safe-Guard Device.--To enhance reliability and protect
    downstream components, ``safe-guard'' devices that reliably seal off
    failed filter elements have been successfully developed.
        Coal Feed and Ash Removal Subsystems.--A key to successful
    pressurized gasifier operation is reliable operation of the coal feed
    system and ash removal systems. Developmental work on the pressurized
    coal feed systems has increased the understanding and optimization of
    their performance. Modifications developed at the PSDF and shared with
    equipment suppliers allow current coal feed equipment to perform in a
    commercially acceptable manner. An innovative, continuous process has
    also been designed and successfully tested that reduces capital and
    maintenance costs and improves the reliability of fine and coarse ash
    removal.
        Syngas Cooler.--Syngas cooling is of considerable importance to the
    gasification industry. Devices to inhibit erosion, made from several
    different materials, were tested at the inlet of the gas cooler and one
    ceramic material has been shown to perform well in this application.
        Advanced Syngas Cleanup.--A slipstream unit has provided a very
    flexible test platform for testing numerous syngas contaminant removal
    technologies to improve environmental footprint and reduce costs in
    IGCC gas clean-up.
        Sensors and Automation.--Significant progress with sensor
    development and process automation has been achieved. More than 20
    instrumentation vendors have worked with the PSDF to develop and test
    their instruments under realistic conditions. Development of reliable
    and accurate sensors for the gasification process has concentrated on
    coal feed, Transport Gasifier, and filter systems. Automatic
    temperature control of the Transport Reactor has been successfully
    implemented.
        Fuel Cell.--Two test campaigns were successfully completed on 0.5
    kW solid oxide fuel cells manufactured by Delphi on syngas from the
    transport gasifier marking the first time that a solid oxide fuel cell
    (SOFC) has been operated on coal-derived syngas. In addition, a NETL-
    erected SOFC multi-cell array test skid was used at PSDF to
    successfully conduct parallel testing of many cells directly on coal
    syngas.
        CO2 Capture.--Slipstream CO2 capture testing
    has been completed on both simulated and actual syngas and results have
    been used to design larger test equipment.

                            PSDF FUTURE TEST PROGRAM

        Developing technology options that will reduce CO2
    emissions is a primary goal for future work at PSDF. These technologies
    will be screened in close collaboration with NETL for selection for
    testing at the PSDF. This facility will serve as a productive test-bed
    for developing advanced technology and is capable of operating from
    bench- and pilot-scale to near demonstration scales allowing results to
    be scaled to commercial application. The PSDF will concentrate on
    developing cost-effective, commercially viable carbon capture
    technology for coal-fueled powerplants through scale-up and continued
    development of several technologies (including for example those being
    developed either at DOE's facilities or by third party technology
    developers).
        For both new and existing powerplants, post-combustion capture
    technology must be made more efficient and cost-effective. In post-
    combustion capture, CO2 is separated from the flue gas in a
    conventional coal-combustion powerplant downstream of the pulverized
    coal boiler. Many technologies are under consideration for post-
    combustion capture, but these technologies need to be proven and
    integrated in an industrial powerplant setting. Activities at the PSDF
    for post-combustion capture technology will include:
        Pilot-Scale Test Modules.--Pilot-scale test modules of advanced
    post-combustion technologies will be designed, installed, and operated
    in an existing pulverized coal plant adjacent to the PSDF. The flexible
    design of these test modules will allow the testing of a wide range of
    technologies on actual flue gas.
        Technology Screening.--Available solvents developed by NETL, PSDF
    and others will be screened to assess readiness for testing at the site
    using improved contacting devices that are now under development.
        Alternative Solvent Processes.--Alternative solvents with lower
    heats of regeneration and more compact, lower cost gas-liquid
    contacting equipment will be developed and tested.
        Advanced Technology.--Compact membrane contactors and solid phase
    CO2 sorbents that are currently being investigated by DOE-
    NETL and private companies will be assessed and installed. PSDF will
    provide a scaled-up testing platform for these technologies as
    development progress warrants.
        In pre-combustion capture, CO2 is separated from the
    syngas in a coal gasification powerplant upstream of combustion in the
    gas turbine. Research & development activities at PSDF for pre-
    combustion capture technology for application to gasification-based
    power generation include:
        Advanced CO2 Capture Systems.--New solvents and gas-
    liquid contacting devices will be evaluated on air-blown and oxygen-
    blown syngas. New sorbent-based or membrane-based CO2
    separation technologies will be scaled-up and tested based on progress
    in fundamental R&D by third party developers.
        Water Gas Shift Enhancements.--New water gas shift reactor
    configurations and sizes are planned for testing at the PSDF. The
    operation of shift catalysts when exposed to syngas at the PSDF will be
    optimized and their technical and economic performance will be
    evaluated.
        Advanced Syngas Cleanup.--New advanced syngas cleanup systems will
    be tested for reducing hydrogen sulfide, hydrochloric acid, ammonia,
    and mercury to near-zero levels.
        In order to develop a cost-effective advanced coal powerplant with
    CO2 capture, all process blocks within the powerplant must
    be optimized in addition to the capture block. Including CO2
    capture in an advanced coal powerplant will increase the plant cost of
    electricity (COE), so opportunities to reduce cost in every part of the
    process will be explored. Although highest priority will be given to
    low-cost CO2 capture process development, projects that
    reduce overall process capital and operating costs will also be
    included in the PSDF test plan to partially offset incremental cost
    increases due to the addition of CO2 capture. These cost
    reduction projects include technology development for syngas cleanup,
    particulate control, fuel cells, sensors and controls, materials, and
    feeders.
                                     ______

                           Prepared Statement of ASME

        Mr. Chairman, ranking member, and members of the subcommittee, the
    ASME Energy Committee is pleased to provide this testimony on the
    fiscal year 2010 budget request for research and development programs
    in the Department of Energy (DOE).

               INTRODUCTION TO ASME AND THE ASME ENERGY COMMITTEE

        The 127,000-member ASME is a nonprofit, worldwide educational and
    technical Society. It conducts one of the world's largest technical
    publishing operations, holds more than 30 technical conferences and 200
    professional development courses each year, and sets some 600
    industrial and manufacturing standards. The Energy Committee of ASME's
    Technical Communities comprises 30 members from 17 divisions of ASME,
    representing approximately 40,000 of ASME's members.
        ASME has long advocated a balanced energy supply mix to meet the
    Nation's energy needs, including advanced coal, petroleum, nuclear,
    natural gas, biomass, solar, wind and hydroelectric power, and energy
    efficient building and transportation technologies. Only such a
    portfolio will allow the United States to maintain its quality of life
    while addressing future environmental and security challenges.
    Sustained growth will also require stability in licensing and
    permitting processes not only for power stations but also for
    transmission and transportation systems.
        A forward-looking energy policy will require enhanced, sustained
    levels of funding for R&D as well as Government policies that encourage
    deployment and commercialization. While the Energy Committee supports
    much of the fiscal year 2010 budget request, especially the increases
    in funds for fundamental scientific research, we wish to reemphasize
    that a balanced approach to our energy needs is critical and we are
    concerned about the decrease in funding for nuclear energy, which is
    essential to meeting our national energy needs.

                                CRITICAL ISSUES

        The Energy Committee would like to point out some critical energy
    issues:
      --Additional investment guarantees for construction of new clean and
            especially nuclear facilities must be enacted in future energy
            legislation. These guarantees will enable lower financing costs
            for a variety of energy technologies leading to lower energy
            costs for the American public. Extending these programs further
            into the future will allow a reasoned rate of increase in
            construction and application of these technologies for electric
            generation.
      --There is a critical shortage of trained persons in the workforce at
            all levels. This includes persons in the various building
            trades that will be involved in the construction of our energy
            systems, persons in the manufacturing industry that will
            manufacture the components that make up our energy systems,
            persons who will be available to operate and maintain the
            energy systems when they are built, and persons trained as
            engineers and scientists at all levels who will perform the R&D
            and design functions for all energy systems. A recent
            initiative, ``Regaining our ENERGY Science and Engineering
            Edge'' or ``RE-ENERGYSE,'' a program being conducted jointly by
            the DOE EERE and the National Science Foundation (NSF) and
            geared to young scientists and engineers, is a positive step
            toward addressing this chronic issue.

                                 FOSSIL ENERGY

        The fiscal year 2010 budget request of $884 million for fossil
    energy represents a $513 million decrease over the fiscal year 2009
    appropriation. Fossil Energy Research and Development would be reduced
    $112 million to $403 million. The R&D budget for oil and natural gas
    related research has been eliminated. It should be noted that the DOE
    Office of Fossil Energy received $3.4 billion for Research and
    Development as part of ARRA, for research, development and deployment
    of carbon capture and sequestration, therefore the ASME Energy
    Committee supports this funding request. The Energy Committee supports
    the current proposed funding for coal research programs at $617 million
    for fiscal year 2010. The effective use of coal in today's environment
    demands an increase in efficiency and a decrease in release of
    environmentally harmful waste streams. A large portion of this effort
    right now is the Clean Coal Program Initiative (CCPI), which received
    $1.5 billion as part of ARRA and therefore, did not request any
    additional funding for fiscal year 2010. This approach builds on
    technological R&D advancements in IGCC and CCS technology achieved over
    the past 5 years and provides commercial-scale demonstration
    opportunities for fossil energy powerplants.
        The use of more efficient processes for coal use, such as advanced
    integrated gasification combined cycle technology, combined with carbon
    sequestration will allow the United States to utilize its coal
    resources in a more environmentally sound and cost effective manner. We
    encourage strong and consistent funding for these programs now and in
    future years.

                            ADVANCED FUELS RESEARCH

        The Energy Committee agrees that the advanced fuels research should
    be aimed at fuels used in the transportation system. We believe that
    the development of transportation fuel systems that are not petroleum
    based is a critical part of our future national energy policy. The
    fiscal year 2010 budget for biomass and bio-refinery systems R&D is
    increased by $18 million to $235 million. The Energy Committee
    encourages Congress to ensure that these research programs continue to
    receive adequate funding. We are also pleased to see the increase to
    $330 million in the effort related to vehicle technologies with a
    program emphasis on plug-in hybrid electric vehicles.

                                 NUCLEAR ENERGY

        The Energy Committee is discouraged to see a steep decrease in the
    DOE Nuclear Energy budget to $844 million in fiscal year 2010. Even
    with the reduction of the MOX fuel fabrication facility from the
    Nuclear Energy budget, placing it back with the Nuclear National
    Security Administration (NNSA), the nuclear R&D portion of the budget
    request is reduced by $112 million to $403 million for fiscal year
    2010. Because of the sharp reduction in funding, and the decision to
    exclude the Office of Nuclear Energy from ARRA, the Committee strongly
    recommends restoring funding for DOE Office of Nuclear Energy to at
    least the levels appropriated in fiscal year 2009. Nuclear power, as a
    non-greenhouse gas-emitting resource, is a critical component of a
    diverse U.S. power generation mix and should play a larger role in the
    Nation's base power supply. Sustained increases in nuclear power
    research are justified by the imperative of low cost, low emissions
    electricity.
        Proposed increases in the Nuclear Energy budget are most evident in
    the Generation IV Nuclear Energy Systems, $191 million, Fuel Cycle R&D,
    $192 million, and Nuclear Power 2010 program at $20 million. The
    primary decrease is in the Generation IV Nuclear Systems Initiative
    which is $45 million. The Energy Committee believes that nuclear
    generated electricity is important to the Nation, especially in a more
    carbon conscious environment. Therefore continued R&D looking at
    advanced nuclear systems is critical.
        The GNEP program, before its cessation in the fiscal year 2009
    Omnibus Appropriations bill, was a vital means to enhancing the future
    of safe, reliable, nuclear energy through the establishment of
    international centers for nuclear fuel cycle services for nations both
    large and small. Although no funding is provided for GNEP, the Advanced
    Fuel Cycle Initiative, now called Fuel Cycle R&D, would receive $192
    million in funding in fiscal year 2010. The Energy Committee concurs
    with the DOE goal to establish a full scale demonstration of the
    required facilities, including a burner reactor and fuel recycle plant
    that will not produce a pure plutonium product stream. The ASME Energy
    Committee is disappointed with the cancellation of the GNEP program and
    urges Congress and the administration to reconsider the discontinuation
    of GNEP. GNEP was established as an international effort and many
    international partners had agreed to participate. This is consistent
    with efforts to establish an international nuclear fuel bank.

                     ENERGY EFFICIENCY AND RENEWABLE ENERGY

        The Office of Energy Efficiency and Renewable Energy (EERE) manages
    America's investment in research, development and deployment of the
    Department of Energy's (DOE) diverse energy efficiency and renewable
    energy applied science portfolio. It should be noted that the DOE EERE
    received $16.5 billion as part of ARRA, including $2.5 billion for
    Research and Development. The fiscal year 2010 request of $2.02
    billion, $570 million above the fiscal year 2009 appropriated amount,
    provides a broad and balanced portfolio of solutions to address the
    urgent energy and environmental challenges currently facing our Nation.
    Most of the key EERE programs, including Biomass, Solar, Wind,
    Geothermal, Building Technologies, Vehicle Technologies, and Industrial
    technologies, have received sizable increases in funding to support the
    growth of renewable energy that the United States needs. The potential
    to reduce the production of greenhouse gases and to meet the growing
    need for domestically produced energy justifies sustained and increased
    support for these programs.
        The Fuel Cell Technologies program, formerly known as the Hydrogen
    technology program has been reduced $100 million from the fiscal year
    2009 appropriation. While the administration has publicly indicated
    that they view the probability of fuel cell vehicles as ``low'', this
    program is a key driver in the development of fuel cell technology. The
    Energy Committee encourages restoring funding to the Hydrogen Program
    consistent with the fiscal year 2009 appropriation. The other
    technology program to receive a cut was the Water Power Program, which
    is now requested to receive $30 million in fiscal year 2010--a 25
    percent or $10 million cut from fiscal year 2009. While relatively
    small, this program supports R&D for wave and ocean energy technologies
    as well as conventional and pumped storage hydropower. Water power will
    contribute significantly to the eventual transition to clean and
    renewable power generation in the United States. The Energy Committee
    encourages restoring funding to the Water Power Program consistent with
    the fiscal year 2009 appropriation.
        The integration of renewable electric generating systems into the
    operation of the electricity distribution system is critical to
    economic operation of these systems. DOE's support of R&D into
    distributed systems integration began in fiscal year 2007. The Energy
    Committee believes that R&D related to the integration of the electric
    grid and its control as a national system is imperative to the growth
    of renewable energy generating technologies and we encourage full
    funding for such research.

                 SCIENCE AND ADVANCED ENERGY RESEARCH PROGRAMS

        The Energy Committee is pleased by the increased request for the
    Office of Science (OS) which restores the funding trajectory mandated
    in the America Competes Act of 2007. It should be noted that the DOE
    Office of Science received $1.6 billion as part of ARRA. The fiscal
    year 2010 budget proposal of $4.94 billion is an increase of $184
    million over the fiscal year 2009 appropriation. OS programs in high
    energy physics, fusion energy sciences, biological and environmental
    research, basic energy sciences, and advanced scientific computing,
    serves, in some small way, every student in the country. These funds
    support not only research at the DOE Laboratories but also work at a
    large number of universities and colleges. We believe that basic energy
    research will also improve U.S. energy security over the long term,
    through its support for R&D on cellulosic ethanol, advanced battery
    systems, and fusion.

                               OTHER DOE PROGRAMS

        DOE is also very active in areas outside of R&D. The environmental
    remediation program that funds the decommissioning and decontamination
    of old DOE facilities is one such program. The Energy Committee
    questions the advisability of all of the budget decreases in this
    program. The coming resurgence in the commercial nuclear arena is
    likely to deplete the trained professionals available for this program
    as engineers choose to move to the more stable commercial environment.
    Congress should appropriate the budget to ensure that this work is
    accomplished in an expeditious manner.

                                   CONCLUSION

        Members of the ASME Energy Committee consider the issues related to
    energy to be one of the most important issues facing our Nation. The
    need for a strong and coherent energy policy is apparent. We applaud
    the administration and Congress for their understanding of the
    important role that scientific and engineering breakthroughs will play
    in meeting our energy challenges. In order to promote such innovation,
    strong support for energy research will be necessary across a broad
    portfolio of technology options. DOE research can play a critical role
    in allowing the United States to use our current resources more
    effectively and to create more advanced energy technologies.
        Thank you for the opportunity to offer testimony regarding both the
    R&D and other parts of the proposed budget for the DOE. The ASME Energy
    Committee is pleased to respond to additional requests for additional
    information or perspectives on other aspects of our Nation's energy
    programs.
        This statement represents the views of the Energy Committee of
    ASME's Technical Communities and is not necessarily a position of ASME
    as a whole.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page

    Alexander, Senator Lamar, U.S. Senator From Tennessee, Questions
      Submitted by...................................................    88
    Alliance for Materials Manufacturing Excellence (AMMEX), Prepared
      Statement of the...............................................   216
    American Association of Petroleum Geologists, Prepared Statement
      of the.........................................................   222
    American Society for Microbiology, Prepared Statement of the.....   220
    American Society of Agronomy, Prepared Statement of the..........   231
    American Society of Civil Engineers (ASCE), Prepared Statement of
      the............................................................   164
    American Society of Plant Biologists, Prepared Statement of the..   229
    American Wind Energy Association, Prepared Statement of the......   226
    APS, Prepared Statement of.......................................   196
    Archuleta, Deanna, Acting Assistant Secretary for Water and
      Science, Bureau of Reclamation, Department of the Interior.....   106
        Prepared Statement of........................................   107
    ASME, Prepared Statement of......................................   242
    Assiniboine and Sioux Rural Water System, Prepared Statement of
      the............................................................   184

    Baker, Ken, Principal Assistant Deputy Administrator for Defense
      Nuclear Nonproliferation, National Nuclear Security
      Administration, Department of Energy...........................    51
    Bennett, Senator Robert F., U.S. Senator From Utah:
        Opening Statements of........................................ 2, 53
        Questions Submitted by...................38, 79, 143, 145, 152, 154
    Biomass Energy Research Association (BERA), Prepared Statement of
      the............................................................   206
    Board of Levee Commissioners for the Yazoo-Mississippi Delta,
      Prepared Statement of the......................................   166
    Board of Mississippi Levee Commissioners, Prepared Statement of
      the............................................................   179
    Bond, Senator Christopher S., U.S. Senator From Missouri,
      Statement of...................................................   121

    Calaveras County Water District, Prepared Statement of the.......   172
    California State Coastal Conservancy, Prepared Statement of the..   167
    Center for Advanced Separation Technologies, Virginia Polytechnic
      Institute and State University, Prepared Statement of the......   234
    Central Utah Water Conservancy District, Prepared Statement of
      the............................................................   196
    Chu, Hon. Steven, Secretary, Department of Energy................     1
        Prepared Statement of........................................     5
        Statement of.................................................     3
    Cochran, Senator Thad, U.S. Senator From Mississippi:
        Questions Submitted by.......................................    45
        Statement of.................................................    94
    Colorado River Energy Distributors Association (CREDA), Prepared
      Statement of the...............................................   197
    Confederated Tribes of the Umatilla Indian Reservation, Prepared
      Statement of the...............................................   199
    Connor, Michael L., Commissioner, Bureau of Reclamation,
      Department of the Interior.....................................   111
        Prepared Statement of........................................   113
        Questions Submitted to.......................................   149
    Crop Science Society of America, Prepared Statement of the.......   231

    D'Agostino, Hon. Thomas P., Under Secretary for Nuclear Security
      and Administrator, National Nuclear Security Administration,
      Department of Energy...........................................    51
        Prepared Statement of........................................    57
        Statement of.................................................    54
    Denver Water, Prepared Statement of..............................   198
    Dorgan, Senator Byron L., U.S. Senator From North Dakota:
        Opening Statements of.....................................1, 51, 91
        Questions Submitted by.................................34, 134, 149
    Dry Prairie Rural Water System, Prepared Statement of the........   184
    .................................................................

    Federation of American Societies for Experimental Biology,
      Prepared Statement of the......................................   204
    Feinstein, Senator Dianne, U.S. Senator From California:
        Questions Submitted by.......................................    76
        Statement of.................................................    53
    Fort Peck Reservation Rural Water System (Public Law 106-382),
      Prepared Statement of the......................................   184
    Freudenthal, Dave, Governor, State of Wyoming, Prepared Statement
      of.............................................................   181
    Friends Committee on National Legislation (Quakers), Prepared
      Statement of the...............................................   236

    Gas Turbine Association (GTA), Prepared Statement of the.........   201
    GE Energy, Prepared Statement of.................................   213
    Grand Valley Water Users Association, Prepared Statement of the..   198

    Harencak, Brigadier General Garrett, Principal Assistant Deputy
      Administrator for Military Application, Office of Defense
      Programs, National Nuclear Security Administration, Department
      of Energy......................................................    51
    Huntsman, Jon M., Jr., Governor, State of Utah, Prepared
      Statement of...................................................   181

    Integrated Building and Construction Solutions (IBACOS), Inc.,
      Prepared Statement of..........................................   211
    Izaak Walton League of America, Prepared Statement of the........   174

    Landrieu, Senator Mary L., U.S. Senator From Louisiana, Questions
      Submitted by.................................................139, 145
    Little River Drainage District, Prepared Statement of the........   176

    Murray, Reed R., Program Director, Central Utah Project
      Completion Act Office, Bureau of Reclamation, Department of the
      Interior.......................................................   106
        Prepared Statement of........................................   110
        Questions Submitted to.......................................   154
    Murray, Senator Patty, U.S. Senator From Washington, Questions
      Submitted by..................................................35, 150

    National Fish and Wildlife Foundation, Prepared Statement of the.   193
    National Mining Association (NMA), Prepared Statement of the.....   225
    New Mexico Interstate Stream Commission, Prepared Statement of
      the............................................................   196
    Northern Colorado Water Conservancy District, Prepared Statement
      of the.........................................................   195

    Presler, Mayor Sara, City of Flagstaff, Arizona, Prepared
      Statement of...................................................   177

    Red River Valley Association, Prepared Statement of the..........   157
    Richardson, Bill, Governor, State of New Mexico, Prepared
      Statement of...................................................   182
    Ritter, Bill, Jr., Governor, State of Colorado, Prepared
      Statement of...................................................   182

    Salt, Terrence C., Acting Assistant Secretary of the Army, Corps
      of Engineers--Civil, Department of the Army, Department of
      Defense--Civil.................................................    91
        Prepared Statement of........................................    97
        Questions Submitted to.......................................   134
        Statement of.................................................    95
    Santa Clara Valley Water District, Prepared Statements of the..170, 196
    Soil Science Society of America, Prepared Statement of the.......   231
    Southern Company Generation, Prepared Statement of...............   239
    Southern Ute Indian Tribe, Prepared Statement of the.............   183
    State Teachers' Retirement System, State of California, Prepared
      Statement of the...............................................   209

    Tester, Senator Jon, U.S. Senator From Montana, Questions
      Submitted by...................................................    78
    The Nature Conservancy, Prepared Statement of....................   161

    Uncompahgre Valley Water Users Association, Prepared Statement of
      the............................................................   200
    Upper Gunnison River Water Conservancy District, Prepared
      Statement of the...............................................   201
    Utah Water Users Association, Prepared Statement of the..........   198

    Van Antwerp, Lieutenant General Robert, Chief of Engineers, Corps
      of Engineers--Civil, Department of the Army, Department of
      Defense--Civil.................................................   102
        Prepared Statement of........................................   103
        Questions Submitted to.......................................   145
    Voinovich, Senator George V., U.S. Senator From Ohio, Questions
      Submitted by.............................................46, 144, 147

    Wyoming Water Association (WWA), Prepared Statement of the.......   183
    Wolf, Bob, Director of Program and Budget, Bureau of Reclamation,
      Department of the Interior.....................................   111

                                 SUBJECT INDEX

                                  ----------

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

                                                                       Page

    Additional Committee Questions...................................   134
    American Recovery and Reinvestment Act...........................   100
    Budget:
        Priorities...................................................   127
        Process......................................................   118
        Request......................................................   144
    Center Hill and Wolf Creek Dams..................................   132
    Chickamauga Lock.................................................   131
    Civil Works Program..............................................   145
    Construction Program.............................................   104
    Earmarks.........................................................   135
    Economic Recovery Act............................................   125
    Environmental Restoration........................................   119
    Everglades.......................................................   136
    Fiscal Year 2010 Discretionary Funding Program...................    98
    Flood Relief Authority...........................................   122
    Fort Peck Reservoir..............................................   128
    Great Lakes......................................................   147
    Inland Waterways:
        Legislation..................................................    99
        Trust Fund...................................................   136
    Investigations Program...........................................   104
    Missouri River...................................................   121
        Recovery:
            Implementation Committee.................................   129
            Plan.....................................................   127
    Norfolk Harbor, Craney Island, VA................................   135
    Objective Performance Guidelines.................................   123
    Operation and Maintenance Program................................   104
    Other Initiatives................................................    99
    Ozark-Jeta Taylor:
        Hydropower Rehabilitation....................................   143
        Power Plant, AR..............................................   135
    Planning Improvements and Performance-based Budgeting............   100
    Red River Valley Flooding........................................   133
    Summary of Fiscal Year 2010 Program Budget.......................   103
    Terminating Projects.............................................   125
    The American Recovery and Reinvestment Act.......................   144
    Value of the Civil Works Program to the Nation...................   105

                              DEPARTMENT OF ENERGY

    Accelerating Loan Guarantees.....................................    31
    Additional Committee Questions...................................    34
    ARPA-E...........................................................    40
    Blue Ribbon Commission...........................................    14
    Clean Up Funding.................................................    45
    CO2 Sequestration.....................................    21
    Cyber Security...................................................    44
    Decarbonizing Coal...............................................    32
    Desert Protection................................................    22
    Energy Innovation Hubs...........................................    43
    Fossil Energy--FutureGen.........................................    39
    Fostering the Revolution in Energy Supply and Demand While
      Positioning the United States to Lead on Global Climate Change
      Policy.........................................................     8
    Funding Allocations..............................................    12
    Geothermal.......................................................    26
    Hydrogen.........................................................    13
        Fuel Cells...................................................    29
    Idaho National Lab--Next Generation Nuclear Plant (NGNP).........    42
    Improving the Management of the Department.......................    11
    Industry Letter..................................................    38
    Innovation Hubs..................................................    18
    Investing in Science to Achieve Transformational Discoveries.....     6
    Loan Guarantee Program...........................................    20
    Loan Guarantees..................................................    15
        Loan Program--3.5 Years and No Rewards.......................    38
    Maintaining the Nuclear Deterrent, Reducing the Risk of Nuclear
      Proliferation, and Advancing Nuclear Legacy Clean-up...........    10
    Not all Science Funding is Equal--Especially at the Weapons Labs.    38
    Nuclear:
        Energy.......................................................    41
        Power........................................................    15
    Pensions.........................................................30, 42
    Recovery Funds...................................................    17
    Recycling Spent Fuel.............................................    31
    Renewable Portfolio Standard.....................................    33
    Science..........................................................    40
    Strategic Petroleum Reserve......................................    25
    The Need for Scientific Leadership Within the NNSA...............    39
    Uranium Taxes....................................................    44
    Waste Cleanup....................................................    23
    Water Power......................................................    24
    Weatherization...................................................27, 44
    Wind:
        And Grid Investments.........................................    26
        Dynamometer..................................................    30
        Energy.......................................................    20
    Yucca Mountain...................................................    42

                    National Nuclear Security Administration

    Additional Committee Questions...................................    76
    Advanced Computing...............................................    82
    Costs and Results of Nuclear Laboratory Privatization............    72
    Cut to Nonproliferation and Detection Research and Development...    84
    Cyber Security...................................................    86
    Defense Nuclear Nonproliferation Overview........................    60
    Does This Administration Support Improved Weapons Use-Denial
      Strate-
      gies?..........................................................    82
    Future of the Los Alamos Neutron Science Center..................    66
    Highly Enriched Uranium in Russia................................    85
    Impact of Flat-funding on Weapons and Non-proliferation Programs.    69
    Laser-powered Fusion Energy......................................    74
    Naval Reactors...................................................    86
        Overview.....................................................    61
    Not All Science Funding is Equal--Especially at the Weapons Labs.    79
    Nuclear:
        Non-proliferation............................................    68
            Efforts..................................................    77
        Posture Review, Weapons Treaty Negotiation, and Stockpile
          Reduction..................................................    71
        Weapons......................................................    76
    Part:
        1--Zia.......................................................    83
        2--Sequoia...................................................    84
    Pension Shortfalls...............................................    87
    Research Integration Between the Department of Energy and
      National Nuclear Security Administration.......................    70
    Science Funding Trends...........................................    67
    Security.........................................................    86
    Strategic Posture Commission--Investment in Infrastructure.......    80
    Transferring the Tritium Mission is a Waste of Taxpayer Dollars..    81
    Weapons:
        Activities Overview..........................................    58
        Labs.........................................................    77

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    Additional Committee Questions...................................   134
    Aging Infrastructure.............................................   150
    Bureau of Reclamation............................................   106
    California Bay-Delta Restoration Fund (CALFED)...................   117
    Central Valley Project Restoration Fund..........................   116
    Desalination Research and Development............................   153
    Drought Assistance...............................................   124
    Fiscal Year 2010 Planned Activities..............................   117
    Odessa Subarea Special Study.....................................   150
    Overview of the Fiscal Year 2010 Budget..........................   108
    Pick Sloan Legislative Proposal (Bureau of Reclamation)..........   110
    Policy and Administration........................................   116
    Project Evaluation...............................................   120
    Quagga Mussels...................................................   152
    Rural Water......................................................   149
        Infrastructure...............................................   130
    Saint Mary's Canal Project.......................................   129
    San Joaquin River Restoration Fund...............................   117
    Tackling Climate Impacts.........................................   109
    The First 100 Days...............................................   108
    Title XVI........................................................   149
    Washington State ARRA Funded Projects............................   151
    Water:
        And Related Resources........................................   113
        Conservation Initiative......................................   109

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